The analysts at The Kobeissi Letter stated that the sudden market crash on Friday led to some cryptocurrencies experiencing a maximum drop of up to 95% within 24 hours, but this does not mean that the market is bearish in the long term or that the fundamentals have deteriorated.
The analysts pointed out that the market crash on Friday was triggered by a combination of short-term factors. These included excessive leverage and risk in the market, as well as U.S. President Trump announcing a 100% tariff on China.
According to data from The Kobeissi Letter, there is a clear bullish sentiment in the market, with $16.7 billion in long positions being liquidated, while short positions amounted to only $2.5 billion, a ratio close to 7:1.
The Kobeissi Letter added that Trump's tariff announcement was made around 5 PM on Friday, at which time market liquidity was low, creating conditions for sharp price fluctuations and significant changes:
The crash in the cryptocurrency market triggered $20 billion in cascading liquidations, with nearly 1.6 million traders forced to exit within 24 hours, surpassing levels seen during the previous FTX and Terra/LUNA collapse crises.
According to Cory Klippsten, CEO of Bitcoin service company Swan Bitcoin, investors and traders should expect price volatility in the short term as the market digests Trump's tariff announcement and its macroeconomic implications.
Klippsten told Cointelegraph that the market turmoil will "clean out leveraged traders and the weak-handed," providing momentum for the next round of new highs.
Other analysts and traders believe that the $20 billion in cryptocurrency liquidations is just the tip of the iceberg, with reported losses accounting for only a small fraction of the actual financial losses in the market and among participants.
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Original: “Analysts say the market crash 'will not affect long-term fundamentals'”
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