Yesterday, the market experienced one of the three biggest waves of liquidations this year. Similar events occurred on December 9 and August 5. This time, $BTC Bitcoin lost 13% of its value, and the situation was even more dramatic for altcoins. But it was a real test for traders: for many, this day turned into a real financial collapse.
Just a few days ago, it seemed like everyone with even a minimal understanding of cryptocurrencies was predicting the imminent arrival of the alt season. But now many have disappeared from sight, as if dissolving into thin air. What has changed?
What was the cause?
I stopped looking for specific reasons for such collapses a long time ago. Whether it's another statement by Jerome Powell, a tweet by Elon Musk, problems with the US national debt, or even news about the delisting of USDT — none of this matters. The main thing is the consequences.
For me personally, the result is predictable: a spoiled mood. It is nice to watch the portfolio grow, but it is very unpleasant to see it shrink. However, this is not the end of the world. The biggest losses are suffered by margin traders, who lose their entire deposit due to liquidations.
What is happening to traders?
People have lost millions of dollars due to liquidations. And don't think that these were inexperienced beginners. Trading with leverage is always a risk that can turn into a disaster.
If you are among those who have suffered losses, it is important to draw the right conclusions. You should not beat yourself up or despair. It is better to:
Use stop-losses.
Reduce the amount of leverage.
Always leave some margin.
Or give up trading futures altogether.
If you managed to make a quick profit, this is also a reason to think. Quick profits often mean high risks. This situation only confirms how volatile the market can be.
Is the correction over?
I would like to believe it, but it is impossible to predict anything 100%. Can the market go even lower? It is quite possible. On the one hand, the correction was quite strong, and liquidations affected even those who traded with minimal leverage. On the other hand, my portfolio, assembled less than a month ago, did not even go into the red and is already showing +15%.
I don't think we're on the verge of a prolonged "crypto-zyme" with a multi-year downturn. Global trends such as the rise in popularity of $BTC Bitcoin and $ETH Ethereum, as well as the general positive background around cryptocurrencies, give reason for optimism. It's hard to imagine a more favorable environment for growth right now.
I am not selling my portfolio. I will continue to wait and monitor the market.
