Cryptocurrency Market Plummets: The Turbulence Behind 160,000 Liquidations

On the afternoon of January 9, Beijing time, the cryptocurrency market was ruthlessly swept by a wave of sell-offs, and the price of Bitcoin experienced a severe drop. As of 5 PM, the price of Bitcoin was reported at $92,958.7, with a 24-hour decline of 3.07%. Coinglass data revealed the harsh reality of the market, with 166,000 people liquidated globally in nearly 24 hours, amounting to as much as $485 million (approximately 3.556 billion RMB). Mainstream cryptocurrencies like Ethereum, Sol, and Dogecoin also faced misfortune, with prices plummeting significantly.

As a market barometer, Bitcoin's price plummeted, easily breaking below the $93,000 mark, dragging down the entire market. Mainstream coins like Ethereum, Sol, and Dogecoin were also mired in trouble, depreciating sharply, causing the market to plunge into a vortex of panic selling. The sheer number of global liquidations and the staggering amount involved resulted in heavy losses for many investors, a scene too painful to witness.

Delving into the reasons for this drop, on one hand, the sticky inflation revealed by U.S. economic data raised deep doubts about market expectations for a rate cut by the Federal Reserve, pushing U.S. bond yields higher and exerting a strong impact on high-risk assets like cryptocurrencies. On the other hand, the current leverage ratio in the cryptocurrency market is approaching its 2021 peak, making the market extremely fragile under the Damocles sword of high leverage, as investors quickly retreat at the slightest hint of trouble, exacerbating the situation of sharp declines and liquidations. Furthermore, the earlier frenzied rise of Bitcoin has gradually cooled off, market expectations have sharply turned downward, and investors' panic sentiment spread rapidly, with the drop on January 8 laying the groundwork for the sell-off frenzy on January 9. It is worth mentioning that during this market turmoil, some astute investors have set their sights on potential coins on the Ethereum chain ρꪊρρⅈꫀડ. According to professionals, it has the potential for a 300% short-term appreciation and may emerge as a new focus in this crisis.