The recent market conditions have indeed been fierce, and the crypto world is in a state of panic. Opening trading groups, all you see are liquidation screenshots—50,000, 100,000 in capital gone in an instant. Some lament: "I was still dreaming of a bull market yesterday, and today I'm already considering 'meeting at the rooftop'." Such scenes repeat themselves, each time tightening the heart. High leverage combined with a sharp drop often results in complete annihilation.

The root cause of the liquidation wave is not actually mysterious. New traders frequently open 20x, 50x, and even 125x leverage offered by certain platforms—this is not trading, it's clearly gambling with their lives. They calculate that "a 1% increase can double the position," but don't realize that a 5% drop can wipe out their entire capital. Taking BTC as an example, when the price falls from $126,000 in October to below $107,000, a 10x leveraged long position will be liquidated with just a 10% adverse move, and the margin will evaporate instantly.

The logic behind the market downturn is even more brutal—it's a chain reaction. From the October peak to now, the decline has exceeded 31%. Price drops → high-leverage positions are liquidated → exchanges forcibly close positions → sell orders flood out → prices continue to fall → more liquidations... like dominoes, once triggered, it cannot be stopped.

The macro environment is also adding fuel to the fire. US GDP data unexpectedly grew to 4.3%, the Federal Reserve's rate cut pace slowed down, and large funds are withdrawing from risk assets. Meanwhile, gold surged to a historic high of $4,500, with institutions rushing to hedge. In this environment, it’s inevitable that the crypto market will remain under pressure.