Why did virtual currencies collectively plummet in the morning!

The reasons for the collective plunge of virtual currencies involve multiple levels, mainly including the following points:

1. The chain effect of high leverage transactions

There are a large number of leveraged transactions in the crypto market. When prices fluctuate sharply, forced liquidation will be triggered, further triggering chain liquidation. According to data, more than 140,000 people have been liquidated in the past 24 hours, with an amount of hundreds of millions of dollars. This leverage effect has intensified the selling pressure in the market.

2. Market manipulation and big money behavior

The risk of market manipulation still exists. Big money has caused drastic price fluctuations through "dumping" and other means, leading to panic selling by retail investors, further amplifying the decline.

3. Insufficient liquidity

The market has a surge in trading volume in the short term, but liquidity is low. It is difficult for investors to close positions or stop losses at ideal prices, resulting in increased losses. This is also one of the important reasons for the drastic fluctuations in the crypto market.

4. Emotional trading and panic psychology

The investor structure is relatively young and emotional fluctuations are large. When the market falls, panic emotions are easy to spread, leading to irrational selling behavior.

5. Macroeconomic and regulatory factors

Some countries may be tightening regulation on cryptocurrencies, and the uncertainty of compliance policies around the world has created negative expectations for the market. In addition, the Federal Reserve's monetary policy adjustments and the rise in risk aversion in the market may also put pressure on prices.

Such violent fluctuations highlight the high-risk and high-volatility characteristics of the crypto market. Investors need to remain calm when operating, avoid emotional decisions, and pay attention to risk management, especially when using leveraged trading. #市场回调，观望还是上车？ $BTC $ETH $BNB