On October 11th, crypto influencer and former FTX community partner Benson Sun posted on social media that many Altcoin had plummeted by over 60% in the early hours of the morning. While previous extreme liquidations have seen around $1-2 billion, this time the scale has increased tenfold. While it's reasonable for the cryptocurrency market to follow the US stock market's plunge, the significant short-term loss of Altcoin market value is unusual and doesn't appear to be simply a result of normal liquidations caused by excessive leverage.
It's more like a large market maker actively withdrawing liquidity, causing the market to instantly fall into a deep vacuum. The decline in Altcoin was even more severe than during the March 12th and May 19th incidents. This round of deleveraging is arguably the most thoroughgoing of the cycle. The market bubble has been completely deflated, and risk leverage has returned to zero. We remain optimistic about the fourth quarter's performance and will implement a phased investment strategy over the next month.
