Yesterday, the cryptocurrency circle directly staged a 'night of liquidation horror'! 153,000 people were collectively harvested, 532 million dollars evaporated in an instant, BTC plummeted from 94k to 89k, and the losses in long positions were devastating, it was truly tragic~

As a result, today BTC slowly rebounded back to 93k, and the comment section immediately exploded: 'Can we bottom fish now?' 'I sold at the lowest point yesterday, should I chase today?'

I flipped through the liquidation data and found that retail investors are not just unlucky; they all stepped into the same pit! What's worse is that there are still people jumping into this pit today...

The truth about liquidations: interest rate cuts are good? Purely wishful thinking!

The trigger for this crash, to put it bluntly, was the Fed's actions: a 25BP rate cut was expected, but retail investors uniformly thought 'rate cut = good news = must rise,' and they wildly opened high-leverage long positions near 92k, waiting to make easy money.

As a result, Powell's one statement extinguished hope: 'There may not be further rate cuts in the future.' The market instantly changed its face and directly reversed to sell off — what you thought was good news had long been priced in at 92k, and with liquidity expectations cooling, it's surprising it didn't drop!

Coinglass data hits hard:

  • Total liquidation of 532 million USD, 153,000 people went bust;

  • BTC liquidation of 170 million, over 75% are long positions;

  • To put it bluntly, it's retail investors collectively betting that 'good news must lead to a rise,' and they were severely educated by the market.

I also stumbled over this! In 2021, BTC dropped from 64k to 48k, I opened a 5x leverage long at 52k, and it directly dropped to 42k; I was liquidated at 46k; that feeling was worse than eating bitter herbs~

After that time, I finally understood: during a volatile period, it's not the wrong direction that kills people, but the 3 'fatal illusions' in your head!

3 illusions led to 153,000 people losing everything!

Illusion 1: Support level = safe zone? Purely a bait from market makers!

Yesterday, many people opened long positions at 90k, reasoning that 'the technicals have strong support.' But the support levels during a volatile period are not iron bottoms; they are traps set by the market makers!

They know retail investors are focused on key levels, so they intentionally broke through 90k, triggering stop losses and liquidations, then immediately pulled it back to 92k — 153,000 people were washed out just like that, while the market makers picked up chips with a smile; isn't that frustrating?

Illusion 2: Leverage = speed up profit? Purely a death wish!

Retail investors love to think: 'The market is unclear, let's take a gamble with leverage!' But during volatile periods, the fluctuations are often 3000-5000 USD; with 10 times leverage, opening long at 92k and dropping to 90k leads to liquidation; opening long at 90k and dropping to 88k leads to zero.

You might not have been wrong about the direction, but before the market kicked off, you were already swept out by the volatility, purely sending transaction fees + liquidation fees to the exchange!

Illusion 3: Good news = immediate rise? Too naive!

The biggest pitfall yesterday was 'rate cut good news.' Retail investors rushed in when they saw the rate cut but forgot two things: first, the expectations had long been digested; second, Powell's speech was the key.

There has never been 'good news must lead to a rise' in the crypto circle, only 'good news exhausted is bad news,' especially during volatile periods, where news is only used by market makers to harvest profits, not to help you make money!

3 survival rules during a volatile period: avoid these 3 things to stay alive!

After experiencing several liquidations, I summarized the 'three don't touch' survival rule, which is centered around 3 words: don't gamble blindly!

1) Don't touch high leverage! At most 3 times, if you can avoid it, do so.

Using high leverage during a volatile period = giving away money! Even if you are confident in the direction, don't open more than 3 times leverage — a 3000 USD fluctuation can't withstand a 300 USD pullback with 10 times leverage; being right in direction doesn't help if you're liquidated first.

Real experts reduce leverage to 1-2 times, or even directly liquidate and observe: you can't make big money during a volatile period, but being able to protect your capital is winning!

2) Don't touch false support! Wait for these 3 signals to bottom-fish.

Technical analysis becomes basically ineffective during a volatile period, support levels are all 'liquidation harvesting lines.' Yesterday's 90k and 88k looked like key levels, but in reality, they were traps!

If you must bottom-fish, at least wait for these 3 signals: ① Break below all key levels; ② Fear index drops below 20; ③ Total liquidation exceeds 800 million USD — only then are you close to the 'real bottom'; otherwise, you're just fishing in shallow waters!

3) Don't chase up and down! Reducing positions + waiting is the way to go.

During a volatile period, frequent trading is the most taboo: chasing long at 92k, chasing short at 89k, getting slapped back and forth, transaction fees + liquidation losses will make you doubt life.

The correct posture is: reduce your position to below 30%, spend the remaining time watching the market and reviewing, waiting for real directional signals to appear. Don't always think 'missing out means losing'; during a volatile period, staying alive is more important than anything!

Finally, let me say a big truth.

Today BTC rebounded back to 93k, and someone asked 'Can we bottom-fish now?' My answer is: not yet! The volatile period hasn't ended; entering the market now is just gambling.

The rules of the crypto circle have never changed: those who die during a volatile period are always the ones who can't wait. The ones who really make money are those who control their positions, wait for signals, and protect their capital.

The lesson from 153,000 liquidations yesterday is right in front of us; don't forget the pain after healing! Remember: staying alive gives you the chance to wait for the next market wave~