1. Retail investors think that the crash is an accident, professional traders know it is 'designed.'
Every seemingly sudden waterfall, sudden spike, sudden LUNA/BTC/ALT crash,
retail investors will say:
“Black Swan!”
“Negative news!”
“Market crash!”
“Panic!”
But what real traders see is only one sentence:
“A certain segment of position structure was concentrated and liquidated.”
Market fluctuations are not natural,
Market is an inevitable result of the capital structure.
All sharp declines and surges
= are a chain reaction of forced liquidation of a certain pile of leveraged positions.
There is no conspiracy in the market,
Only the mathematical results of structure, algorithms, liquidity, and positions.
The more you understand this, the less you will fear a big market,
and you will even start to anticipate it.
2. Liquidation curve: The starting point of a real market explosion
What is the liquidation curve?
is a distribution map of positions that will be forced to liquidate at different prices.
Retail investors only look at the price,
Main players only look at:
Where are the most positions
Where leverage is most concentrated
Where one strike can trigger a chain liquidation
Where is the 'cheapest killing point'
What you see is the K-line,
What they see is a series of 'positions awaiting execution'.
The liquidation curve determines the market direction,
not technical indicators.
For example:
If bulls leverage heavily at 63,500–64,200,
the main players only need to spend 5% of the cost to crash the price to 63,000:
——Instantly triggered:
Liquidation orders
Deferred selling pressure
Automatic liquidation
Forced short protection
Hedged funds liquidation
Prices will waterfall down along the 'most concentrated death zone'.
This is called liquidation waterfall.
3. The cost for the main players to create black swans is extremely low: why?
Many people think main players need to spend a lot of funds to cause a market crash.
This is a misconception.
What truly causes the market to crash is not the main funds, but the passive selling pressure.
In other words:
Main players don't need to crash the market,
they just need to 'knock down the first domino'.
What's left is 'automatic selling'.
Automatic selling is more terrifying than the main funds:
Liquidation automatic market sell
Automatic liquidation executes at the worst price
Quantitative strategies trigger stop losses
Risk control systems automatically reverse
CTA algorithm sells
Market makers withdrawing depth causes price gaps
One liquidation point is breached,
Behind it is a series of 'algorithmically driven death waterfalls'.
The main players only need to find:
The position with the thinnest liquidity
The price zone where liquidation points are most concentrated
The interval most sensitive to algorithmic strategies
Knock here.
The market will collapse on its own.
This is not a conspiracy,
it's mathematics.
4. Three most common 'waterfall triggering patterns'
The following three types are what you as a KOL must clarify, because they are what followers want to understand the most but no one explains clearly.
Model 1: Actively breaking through the liquidation dense zone (most violent)
Characteristics:
Thin depth
Concentration of liquidation points
L/S skew (long-short skew) is severe
Extreme perpetual rates
Main player strategy:
Find the segment where 'the most passive liquidation orders' are located,
and quickly push in with relatively small funds.
Result:
Triggering forced liquidation
Forced liquidation triggers more forced liquidations
A crash with almost no retracement
The further it drops, the faster it goes
for example BTC in May 2021, ETH in June 2022, BTC in August 2023.
This is not a bearish signal,
but a structural collapse.
Model 2: Deep withdrawal → liquidity void (cheapest)
A more advanced 'black swan manufacturing method':
Main players do not crash the market.
They just — withdraw depth.
When the support orders disappear in an instant, a small selling pressure is all that's needed for a drop.
It's like you're walking on a staircase,
suddenly the next step is gone.
Did you think panic caused the deep withdrawal?
In fact, the reality is often the opposite:
Deep withdrawal → leads to price gaps → triggers panic
Many market crashes are triggered this way.
This is also why professional traders focus on depth and order books.
Model 3: Extreme rate squeeze (most hidden)
When rates are extreme:
🟥 Positive rate is very high → bulls are paying to hold on
🟦 Negative rate is very high → bears are paying to hold on
When the main players see one side 'can't afford it',
they will create a directional false breakout:
Upward spike → bull stomp → liquidation
Downward spike → bear stomp → liquidation
This type of 'liquidation-induced market' is the most typical:
You thought it was a breakout,
but in reality:
the prelude to opposite liquidation.
5. Why does the liquidation waterfall fall faster and faster? (Very few people explain it clearly)
Because liquidation is:
Market Order
Not
Limit Order
What does it mean?
Those who are liquidated won't wait for a good price,
their positions will be sold directly at any price that can be executed.
The further down, the worse the execution,
The worse it gets, the more liquidation is triggered,
More liquidation leads to faster price jumps.
This is the most typical —
Negative Feedback Loop
Professional traders can foresee the waterfall in advance,
because they know:
As long as one point is triggered,
the subsequent algorithms will help you push the market down.
Main players don't need to spend money.
The algorithm automatically helps them work.
6. How do the main players judge 'where the waterfall will stop'?
Once you mention this viewpoint, followers will share it madly because no one explains it so systematically.
The bottom of the waterfall is not determined by emotional judgment, news, or support lines.
The bottom of the waterfall is viewed as:
① Have the liquidation orders been fully cleared?
As long as the liquidation points are not cleared, the waterfall won't stop.
The bullish positions must be fully liquidated before the downtrend ends.
② Is depth recovering?
The bottom of the waterfall will see a large number of support orders reappear.
Not necessarily a true support order,
but enough to stabilize the price.
③ Have market makers restored quotes?
During the waterfall, MM will withdraw liquidity.
Bottom MM will return.
This is a critical stop signal.
④ Has there been a reverse liquidation?
For example:
Bulls are fully liquidated → bears start a chain explosion
Shorts are fully liquidated → bulls start to counterattack
If you see the opposite direction of liquidation starting,
the reversal has already begun.
7. The biggest mistake of retail investors: treating the 'liquidation waterfall' as 'trend confirmation'
This is the ultimate reason why most people lose money.
Liquidation waterfall is not a signal for trend continuation,
but rather:
A signal of 'trend overextension'.
The waterfall is not the 'beginning',
the waterfall is the 'epilogue'.
What the main players want is liquidation,
not direction.
After liquidation is complete, the direction can reverse at any time.
What you see is:
‘The drop is too strong, the trend is very strong.’
What professional traders see is:
‘The waterfall is missing the last segment.’
What the main players see is:
‘It’s almost cleaned up, we can reverse now.’
This is the disparity in levels.
Algorithms are scarier than funds, liquidation is harsher than the main players#加密市场反弹 #美SEC推动加密创新监管 #PIPPIN带你体验跌宕起伏的币圈 $BTC $ETH $pippin
