11.24 Will the market experience a flash crash again?
Due to yesterday's flash crash of WBTC, which plummeted from $100,000 to $5,000, many people are particularly concerned about whether Ethereum and other altcoins will experience a similar situation.
Firstly, WBTC corresponds to a 1:1 ratio of Bitcoin, exchanging for equal value. The specific reason for the flash crash is not particularly clear, but it is evident that 'leveraged trading' was affected.
Currently, the market's greed index remains above 90, and retail investors' greed index for the single coin Ethereum is an astonishing 97, just 3 points away from the extreme greed index of 100. Long positions are also over 90%, which is very high and cannot be easily shaken off.
Many new investors in the market have not experienced an 80% drop in altcoins or Bitcoin; their concept of a market decline is a 20% or 30% drop. After yesterday's flash crash of WBTC, they didn't feel it was related to them, so it is normal to see flash crashes in other cryptocurrencies again.
We believe that if Bitcoin experiences a correction, Ethereum and other altcoins will also plunge significantly. Do not think that other altcoins are rising and that the market is still in a relatively stable condition; the rise could also be a preparation for a significant drop, clearing out the shorts first.
Therefore, we are mainly shorting while respecting the market. If we successfully hit the top this time, we can use the floating profit to increase positions and continue to enlarge our holdings, ensuring our average price is around 3490.
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