Golden Finance reported that after the entire network was wiped out by 225 million US dollars in the past hour and long positions became the hardest hit area, the cryptocurrency market has once again witnessed a “black swan” event. The price of BTC has continued to decline, breaking through the key mark of $104,000. It is now trading at $103,971.43, with a 24-hour decline of 4.41%. The market situation is highly volatile, and investors are in a state of panic.
Recently, the cryptocurrency market has already been Mired in turmoil. Israel’s strike against Iran has triggered a geopolitical crisis, and the global financial market’s risk-averse sentiment has risen sharply like a volcanic eruption. As a high-risk asset, cryptocurrencies have become the first target for capital to flee. Previously, trader Aguila Trades closed a 20-fold BTC long position, incurs a loss of over 11.7 million US dollars, which has laid the groundwork for the market crash. This time, BTC’s drop below $104,000 has further ignited a fire in the fuel tank of market panic. As pessimism spreads in the market, investors are selling off BTC one after another, leading to an imbalance between supply and demand and an accelerated decline in prices. This, in turn, triggers more highly leveraged long positions to go bankrupt, creating a vicious cycle.
From a macro perspective, the uncertainty of the global economic situation and the changes in regulatory policies for the cryptocurrency industry have also exerted significant pressure on the price of BTC. Although the US SEC has abolished some rules, regulatory uncertainties still exist, and investors’ confidence in the cryptocurrency market is difficult to recover quickly. Meanwhile, factors such as the slowdown of global economic growth and inflationary pressure have made investors more inclined to shift their funds to traditional safe-haven assets, further weakening the market demand for BTC.
As a “barometer” of the cryptocurrency market, the sharp drop in BTC’s price has had a profound impact on the entire industry. Investors holding BTC have seen their assets shrink significantly, their investment returns vanish, and some have even lost all their money. Cryptocurrency-related enterprises, such as mining companies and trading platforms, are also facing difficulties like declining revenue and user loss. Due to the decline in BTC prices, mining companies have seen a sharp drop in mining profits and a relative increase in operating costs. Some small mining companies are even facing the risk of going bankrupt. Due to the decline in market activity, trading platforms have seen a reduction in fee income and also have to deal with the system pressure brought about by large-scale margin calls.
Looking ahead, it is highly uncertain whether the price of BTC can stop falling and stabilize. If the geopolitical situation eases, the risk-averse sentiment in the global financial market cools down, and the cryptocurrency industry can enjoy more favorable policies, the price of BTC may rebound. However, if negative factors continue to escalate, such as escalating geopolitical conflicts and further tightening of regulatory policies, the price of BTC may fall further to seek new support levels. In the current complex and volatile market environment, cryptocurrency investors need to remain highly vigilant, closely monitor market dynamics, reasonably control their positions, take effective risk prevention measures, and avoid blindly following the trend to cope with the challenges brought by the price fluctuations of BTC.
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