This morning when I woke up, the first thing I saw was not the alarm clock, but my phone vibrating non-stop.
The market group, contract group, and airdrop group all exploded—some are cursing the market makers, some are posting liquidation records, and others quietly changed their avatars to black candles.
Opening the market, Bitcoin was once smashed down to below 85,000 USD, with a maximum intraday drop approaching double digits, and the pullback has already exceeded 30% from the high of 126,000 on October 10.
Ethereum has also knelt down, dropping to the range of 2700–2800 USD at its lowest, with a 24-hour pullback of about 7–10%, and mainstream coins are deeply red.
If we only look at the price, this is certainly uncomfortable.
But what truly alerted me were those few numbers behind it—
• In one day, nearly 1 billion USD in leveraged positions were mercilessly liquidated;
• The fear and greed index has dropped back to around 20, returning to "extreme fear";
• The old DeFi project Yearn's yETH pool was attacked, about 1000 ETH was stolen, coinciding with the emotional downturn of this drop.
Prices are dropping, leverage is exploding, emotions are collapsing.
A typical "mid-term assessment in a bull market".
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What exactly happened today? Don't just focus on that long bearish candlestick.
First, sort through the information; people will be much calmer.
1) Market perspective: December opens with darkness.
From last night to today, BTC once fell below 85,000 USD, then pulled back in the 85,000–87,000 range, but overall still saw a decline of 6–10%, setting the largest single-day drop in nearly a month.
Mainstream coins like ETH, BNB, SOL, and XRP fell 5–9%, with the total market cap evaporating by hundreds of billions of dollars in one day.
2) Leverage perspective: nearly 1 billion USD was taken by the market as tuition fees.
According to various data statistics, the total amount of forced liquidations across the network in the past 24 hours approached 1 billion USD, with long and short positions being liquidated together, a typical "cleaning leverage day".
This means: many people are not "wrong about the direction", but rather they put in too much capital and cannot withstand the volatility.
3) Event perspective: DeFi has another incident, becoming the last straw that breaks the emotional camel's back.
Yearn's yETH pool was exploited by attackers to mint yETH, draining the pool, stealing about 1000 ETH (about 3 million USD). After the news broke, ETH and a number of DeFi tokens were immediately panic-sold.
4) Macroeconomic perspective: US stocks are all kneeling, risk assets collectively being "downgraded".
It's not just the crypto market that's dropping; US tech stocks and crypto-related stocks are also experiencing a "dark opening" in December. The Dow and Nasdaq are correcting, with Coinbase, mining companies, and holding companies' stock prices dropping simultaneously, indicating that this is not just a small circle's emotion but a global capital's one-time risk exposure.
Putting these four things together, you will find:
Today is not a "random knife coming out of nowhere", but a "healthy stampede" under the resonance of high leverage + black swan small accidents + declining macro risk appetite.
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Three types of people in this decline determine three completely different outcomes.
In the past two days of scanning the group, I saw three very typical figures. You can see which one you fit into:
The first type:
The "protagonist" who is fully leveraged and always All in.
The thing these people love to say is:
"If I don't get on the bus now, it's about to take off, so I'll leverage a bit more!"
As a result, when the market plunged, the situation was still unclear, and people were already removed from the system.
Their problem is not the direction, but rather: they left themselves with no "margin for error".
The second type:
Holding spot while cursing the market makers, but secretly placing grid orders, is the "stubborn player".
They are cursing in the group, saying "the market maker is too bearish, Fake bull",
At the same time, open your phone and slightly adjust the previously set buy orders down.
They understand a simple principle:
The bull market is not a straight line, but those who take corrections as "discount days" end up taking away the chips.
The third type:
Watching from the sidelines without positions is uncomfortable, but at least the "audience" hasn't been hurt.
They may have just experienced a previous wave of being trapped or have always felt "too high to dare to buy".
This decline looks "reasonable" in price, but due to the fear index dropping to extremes, they are afraid to reach out.
The problem with these people is not in position management, but rather:
Always wanting to buy at the absolute bottom, only to miss all acceptable bottoms.
To say something that might not sound good:
Today's large bearish candlestick is not a disaster for the crypto circle,
It’s more of a "position education class" starting.
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What is "different" about this decline?
If you've been in the crypto circle for more than one cycle, you will find:
Every major drop, someone shouts, "the bull market is over".
But what is truly worth our attention are the several "details" behind this drop.
1) Extreme fear is not uncommon; what is rare is that fear comes so quickly.
In October, people were still cheering for BTC breaking 120,000, now it has dropped to 85,000, and the fear and greed index has switched from "greed" to "extreme fear" in less than two months.
This indicates:
The funds in the market have not completely left; they have just switched from "mindless all-in" to "cautious bottom fishing".
2) This is not a collapse of on-chain logic, but rather "the capital structure is self-cleaning".
Whether it's the long-term holdings of BTC spot ETFs or institutional companies holding coins (like Strategy, which holds hundreds of thousands of BTC), there has still been no collective panic-selling.
The ones truly liquidated are:
• High-leverage contracts bought at high points;
• Only looking at candlesticks and not short-term FOMO without considering risk.
3) DeFi has been hacked, emotions have been frightened, but the infrastructure is no longer as fragile as it was in the 2019 bull market.
Yearn being attacked is certainly a negative event, but compared to the early days when "one protocol had an issue and the entire chain collapsed", the current DeFi ecosystem has diversified across multiple protocols and chains.
There will be panic, but the single-point risk's destructive power on the entire ecosystem is decreasing.
For veteran players, these points are more important than that bearish candlestick.
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So what should ordinary people do now? Here’s a simple but practical action checklist.
I don't want to say the kind of clichéd advice like "long-term outlook, buy on dips" that you can find in any article.
If today is treated as a "risk management lesson in December", a more realistic approach is:
1️⃣ First, close the contract page and check if you are a "full warehouse player".
• If you are still using high leverage above 10–20 times right now,
If you can get through this wave, you can only say you were lucky.
• If you really want to play, you might consider:
Control leverage within an acceptable range, or even directly use small positions to test and learn.
Put "survival" before "making quick money".
2️⃣ Those who hold spot should write down their "mental stop-loss line" and "add position line", rather than just keeping it in their heads.
For example:
• When BTC breaks a certain price, you admit that your rhythm is wrong and reduce some positions;
• At the same time, set a plan for "extreme fear + key support level" to add positions.
Have a set plan for when real fear strikes, rather than deciding based on emotions on the spot.
Don't forget, the current fear index has dropped back into the "extreme fear" range, which often means historically:
It's not an immediate V-shaped reversal, but it won't be far from the "value range".
3️⃣ Those still watching from the sidelines should stop fantasizing about "catching the absolute bottom".
You can design a very simple plan for yourself:
For example, divide into 5–10 times, buying slowly when the fear index remains in the "fear/extreme fear" range, triggered by time + price.
Remember one thing:
Buying in the range where others are collapsing is much more important than buying at the absolute bottom.
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In the end: this knife cuts prices, but also human nature.
Every market cycle will have a candlestick that people remember:
• Some have had their principal cut off, and they no longer play in this market;
• Some have had their fantasies cut off, starting to learn position management;
• Some have had their last bit of hesitation cut off, daring to reach out slowly when others are fearful.
Today's "first knife of December" did not tell us that the bull market is over,
It simply reminds you directly:
The bull market has never meant that everyone profits, but rather those who learn to befriend volatility quietly take away the chips.
If you are seeing this, think about it:
In this wave of decline, what kind of person are you?
And when the next extreme fear comes, do you plan to make the same choice or change the script?
