Loan positions were forced to be liquidated. Don’t take chances with the market’s depth.

Source: Liu Jiaolian

Yesterday was a tragic day.

Although BTC only briefly made efforts towards 38.5k, which was only 21% lower than the local high of 49k on the 11th, it triggered a widespread collapse of copycats.

The king of copycats, ETH, did not hold back either. 2.2k dropped 18.5% from the local high of 2.7k on the 12th. The market seems to have completely forgotten the narrative of ETF and Cancun expansion.

BitMEX founder Hei Ge went short and bought put options at the end of the month. It also lost money on Solana, which it bought not long ago.

Frustrated and desperate. What a panic.

There is a saying that goes well, no one makes money when prices go up, and everyone loses money when prices go down.

Whether it is an inscription coin or a meme coin, if there is no endogenous way to eliminate the bubble, it will basically just flow in a wave. The banker finished harvesting and took away the leeks in a wave. The car is too heavy to pull. This plate is considered useless from now on. The bookmaker's meeting has a new narrative and a new theme, and the market is starting again. It has become an iron rule to speculate on the new and not on the old. Once it is buried in an old plate, it is basically useless for the rest of its life. Early excision and early birth.

Financial tycoon Soros once said:World economic history is a series based on illusions and lies. To gain wealth, you must recognize the illusion and invest in it. Then quit the game before anyone else catches on.

As early as the end of last year, Jiaolian reminded: The road to the bull market is by no means smooth. Nowadays, a large number of people are tempted by the earth dog inscription, and high-risk positions have accounted for half or even more of the positions. This is definitely extremely risky; and the market must be ruthlessly washed in order to continue to grow healthily.

When the storm is about to come, it is not necessary to reduce positions, but it is necessary to strictly conduct stress testing and proactively reduce risks.

For example, leverage, especially on-site leverage, must not be overestimated!

Don't have any illusions about the lightning-fast power of violent injections, nor should you take any chances with the depth of the market's decline.

Thinking back to the night of "519" in 2021, BTC plunged directly from the level of 50,000, and the pin was inserted at 30,000, which was to explode the leverage of 30,000 dollars at a fixed point. At that time, Jiaolian held the leverage of on-site mortgage lending. Although I had done many stress tests before and put the leveling line below $20,000, I was still shocked. 30,000 to 20,000, which is just another 1/3.

The difference between 20,000 and 50,000 is designed to fall by 60%. In a bull market, this safe space may be just enough, but it is not enough for peace of mind.

In the crypto market, 5x leverage is very common, so a 20% drop is commonplace. 3x leverage is quite a lot, and a 33% drop can often occur on a stormy night. The last meal is often 2x leverage, which is not easy to get. However, when short sellers take advantage of external forces and pounce on food, it is not impossible but very possible to attack -50% in a short period of time.

Yesterday, there was a short-term flash crash of a certain platform currency, which instantly plunged nearly 50%, liquidating the positions of many mortgage borrowers.

For altcoins, 70% or even 90% of the safe space has arrived At the extreme moment, it is often not enough.

Lending is a temporary pleasure, but liquidation leaves you with regrets. At dusk, where can I go to my hometown? The misty waves on the river make people sad.