The cryptocurrency market has encountered severe adjustments. In the past two days, the total market cap plummeted from $3.11 trillion to $2.98 trillion, evaporating $13 billion. This bloodbath reflects the structural fragility of the market and the resonance of multiple bearish factors.

Leveraged liquidations have triggered a chain reaction. In the past 24 hours, $220 million in leveraged positions have been liquidated, with long positions losing $183 million and shorts only losing $37.67 million, resulting in devastating impacts on leveraged longs. What is even more concerning is that currently, $6 billion in leveraged trading is on the brink of risk, as any movement of BTC up or down by $9,000 could trigger large-scale liquidations.

BTC has fallen below critical support. Bitcoin has retreated from its historical high of $126,000 to the range of $88,000-$90,000, with a decline of over 30%. Technically, BTC has fallen below the 50-day moving average ($90,734) and the 200-day moving average ($108,462), with the OBV (On-Balance Volume) indicator dropping to -282k on the daily level, indicating that trading volume cannot support the price.

Fear sentiment is spreading. The market Fear & Greed Index has fallen into the "Extreme Fear" zone, severely undermining investor confidence. This occurs after the Federal Reserve's rate cut, where the market originally expected that loose policies would drive cryptocurrency prices up, but the reality is the opposite, indicating that the market's sensitivity to interest rates has decreased and is more constrained by endogenous risks.

On-chain data reveals clues. Ethereum experienced a net outflow of 71,431 ETH (approximately $22.2 million) on December 14, indicating that large holders are withdrawing. In contrast, Bitcoin saw a net inflow of 1,324 BTC (approximately $11.8 million) to exchanges, suggesting selling pressure. Stablecoins, however, have shown a massive outflow of $1.53 billion, which typically indicates that funds are looking for buying opportunities, potentially forming a reversal signal.

Outlook. Analysts warn that if the Bank of Japan raises interest rates as scheduled on December 19, BTC may further probe down to $70,000. However, there are also voices pointing out that the current adjustment is a healthy leverage washout, accumulating strength for the next round of rises.

The market is undergoing growing pains, with caution and opportunity coexisting.