➤A Glimmer of Rationality in Despair
In the early hours of today, nearly all mainstream tokens experienced a drop of 10% to 15%, with even Bitcoin, a benchmark for the market, plummeting from a high of $78,000 to nearly $73,000 in just one day, a daily drop of nearly $5,000, aptly termed a "urine-style drop."
Ethereum's performance was even more dismal, once approaching $1,600, with its exchange rate against Bitcoin dropping to 0.029, even briefly falling below 0.02, returning to the low levels of 2020.
Other altcoins like Solana dropped from $295 to $108, mainstream DeFi tokens such as UNI fell to $5, AAVE to $130, and meme coins like Doge and Pepe saw declines of up to 70%-80%, leaving the market in a state of lament.
In the past 4 hours, the liquidation amount for long positions reached $400 million, with leveraged players almost being "completely wiped out." Is the market's decline due to exhausted liquidity, or is it dominated by panic sentiment? The answer may be a combination of both.
Last Friday, when U.S. stocks plummeted, Bitcoin only saw a slight decline of 1%, seemingly resistant to drops; however, today's correction was merciless.
What is even more concerning is that this week, U.S. tariff policies may come into effect, combined with the uncertainty of the A-shares opening after the Qingming Festival, and the potential circuit breaker risks in the U.S. stock market, the crypto market may face further challenges.
The Hong Kong Crypto Conference is ongoing, but aside from social entertainment and vague discussions on AI and meme topics, it has not brought any substantial benefits. Previously surging concept coins like CFX and MASK due to the Hong Kong conference have now also plunged to rock bottom.
I believe that the rapid liquidation may actually be a good thing; the current market's high volatility and low liquidity have amplified panic effects but also provided opportunities for rational investors.
My view is that at this stage, Bitcoin at $80,000 still represents a relatively high level, far from a reasonable buying point, and altcoins are even more "bottomless." Positioning should be controlled at 10%-15%, and only Bitcoin should be considered, as the risks of other tokens are too high.
This round of sharp decline has left even "diamond hands" holders numb, in stark contrast to the previous logic of "as long as you don't trade contracts, you’ll be fine." The cyclical decline of the crypto market seems to be inevitable, but history tells us that every valley is the starting point for the next rebound.
