Jun Cheng Technology analyzes technically that just over the past weekend, the cryptocurrency market once again experienced dramatic changes. Bitcoin (BTC), the world's most well-known cryptocurrency, after briefly breaking through the high point of $93,000, suddenly experienced a sharp decline, falling below the important psychological support level of $90,000. According to Coinglass data, this crash resulted in over 260,000 investors facing liquidation overnight, with a total liquidation amount close to $1 billion, which is undoubtedly a heavy blow to the market.
On the evening of January 13, Bitcoin prices continued to decline, once dropping below $90,000 per coin, reaching $88,909 per coin. As Bitcoin prices fell, most cryptocurrencies also declined, with Ethereum's maximum intraday drop exceeding 7%, reaching a price of $2,900 per coin; Dogecoin's maximum intraday drop was close to 4%, with a lowest price of $0.30834 per coin.
The risks of leveraged trading are highlighted
In this event, many investors used leveraged trading, which means borrowing funds to increase their investment scale in hopes of obtaining higher returns. However, when market prices move unfavorably, these leveraged operations become extremely dangerous. Jun Cheng Technology analyzes that due to the high volatility of the cryptocurrency market, even experienced traders may find it difficult to predict short-term market trends. Therefore, when Bitcoin prices rapidly decline, a large number of unliquidated leveraged positions are forcibly liquidated, resulting in a massive liquidation phenomenon.
Cheng Technology | Bitcoin plummeted by 90,000, 260,000 people faced liquidation due to the impact of the macroeconomic environment and policy uncertainties
Jun Cheng Technology believes that besides internal market factors, changes in the external economic environment and policies are also important factors affecting Bitcoin prices. The uneven pace of global economic recovery, adjustments in monetary policy by major economies, and different attitudes of governments towards cryptocurrencies have all brought uncertainty to the market. In particular, news regarding the Federal Reserve's future interest rate decisions and information on certain countries strengthening their regulations on Bitcoin and other digital currencies will directly or indirectly impact investor sentiment and behavior patterns.
Opportunities and challenges from a long-term perspective
Despite such drastic price fluctuations in the short term, Jun Cheng Technology believes that in the long run, cryptocurrencies as an emerging asset class still possess vast development potential. With technological advancements and increased social acceptance, more and more traditional financial institutions are also beginning to enter this field. For individual investors who wish to participate, it is crucial to understand their risk preferences, choose appropriate investment strategies, and maintain a rational mindset. At the same time, as the market gradually matures, it is expected that more specialized financial products and services will be launched to help investors better manage and reduce risks.
Jun Cheng Technology | Bitcoin plummeted by 90,000, 260,000 people faced liquidation
Conclusion: Emphasize risk management, embrace innovative trends
Finally, faced with the rapidly changing financial markets, whether in cryptocurrencies or other investment varieties, investors should strengthen their knowledge base and enhance self-protection awareness. While pursuing profits, it is essential to emphasize risk management, allocate assets reasonably, and avoid unnecessary losses due to excessive speculation. Moreover, we should actively pay attention to industry dynamics and technological innovations, welcoming various possibilities for the future with an open mind. Jun Cheng Technology concludes that although Bitcoin's recent performance has posed challenges for many participants, it also provides an opportunity to reflect on how to participate more robustly in this vibrant yet risky new economic form.#BTC☀