Recently, the cryptocurrency market has once again fallen into severe turbulence, with implied risks rapidly escalating. After the introduction of a new round of tariff policies in the United States, market confidence has been shaken, causing Bitcoin (BTC) to drop below $115,000, which subsequently triggered a massive wave of profit-taking and liquidations. During the East Asia trading session, mainstream coins such as Ethereum (ETH), Solana (SOL), and Dogecoin (DOGE) all experienced declines, typically ranging from 5% to 8%.
In the midst of extreme volatility, over $600 million to $700 million in leveraged positions were forcibly liquidated in the past 24 hours, with the vast majority being long positions. Most traders failed to stop losses in time, resulting in significant losses. For example, a whale account for Dogecoin triggered a partial liquidation of a 10x leveraged long position after a price drop of about 10%, incurring losses exceeding $3 million.
The continuous downward trend in the market is also accompanied by ETF fund outflows. On August 1 alone, altcoin ETFs saw approximately $320 million in redemptions, while Bitcoin ETFs faced outflows of $812 million. This reflects that institutional investors are actively withdrawing, exacerbating market liquidity tensions.
At the same time, there are signs that the structure of the cryptocurrency market is evolving. As early as mid-July, the United States passed its first federal legislation related to a stablecoin system—the "Genius Act," which requires stablecoin issuers to achieve full collateralization and be included in anti-money laundering regulatory frameworks. Although this regulation enhances transparency and compliance, analysts still warn that stablecoins may decouple in financial stress scenarios, leading to redemption waves and triggering chain risks.
In terms of the global regulatory landscape, China announced the disposal of confiscated cryptocurrency assets through authorized platforms in Hong Kong, strategically injecting liquidity into the market by selling through concentrated transactions in Hong Kong, thereby enhancing its influence on global cryptocurrency asset pricing. This indicates that regulators are viewing liquidity as a policy tool rather than merely a preventive measure.
Additionally, the current U.S. government has proposed joint regulation of the spot cryptocurrency asset market by the CFTC and SEC, establishing a "market structure framework" aimed at filling regulatory gaps and enhancing market stability. This policy has initially gained support from the industry and is seen as an important step toward mainstreaming cryptocurrency assets.
However, despite some institutional acquisitions or trading arrangements being absorbed by the market, such as Galaxy Digital recently executing a Bitcoin sale of up to $9 billion with only about a 1% market fluctuation, demonstrating the maturity and resilience of institutional trading infrastructure, such exceptions do not mask the overall ecosystem's vulnerability to concentrated leverage and overwhelming losses for long positions.
In summary, this round of market turmoil has brought the volatility and liquidation risks within cryptocurrency assets into the spotlight. Investors are highly exposed to price fluctuation risks under high leverage conditions, while institutional and liquidity design becomes a key consideration for stability. Whether the market can stabilize in the future depends on policy expectations, institutional participation to solidify liquidity, and whether risk management mechanisms can be further strengthened.
Currently, the cryptocurrency market stands at the intersection of volatility and liquidation risks. It is essential to closely monitor macro policy changes, regulatory progress, and the improvement of platform liquidation mechanisms. Investors should exercise greater caution in controlling leverage amid intense volatility, while institutions need to strengthen liquidity and risk mitigation mechanisms to collaboratively enhance overall market robustness.
Related: Tron founder Justin Sun returns from space
Original: “Crypto Market Turmoil Sparks Liquidation Storm—Volatility Meets Risk”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
