A global market crash has left 1.6 million traders experiencing the harsh realities of the market in the dead of night. On October 10th, Beijing time, the global financial markets faced a "Black Friday." All three major U.S. stock indices plummeted, with the Nasdaq index dropping over 3%. The cryptocurrency market was even more brutal, with Bitcoin once falling over 13%, dropping below the $110,000 mark. This crash resulted in over 1.6 million liquidations, with the total liquidation amount reaching $19.1 billion, setting a record for cryptocurrency contract trading in the past decade. This collective plunge in the global market was not caused by a single factor but was the result of a series of macroeconomic black swan events and internal market structural vulnerabilities. When the Trump administration's tariff threats met the high leverage in the cryptocurrency market, a perfect storm was formed.
01 Macroeconomic Black Swan: Policy Shift Triggers Global Panic
The trigger for this global asset crash directly points to the Trump administration's sudden trade protectionist policies.
● President Trump announced that the U.S. will impose a 100% tariff on China starting November 1, instantly igniting panic among global investors.
○ The threat of a trade war reigniting shattered the market's previous calm, prompting investors to sell off risk assets and turn to safe havens like gold and government bonds.
● Meanwhile, the U.S. federal government "shutdown" entered its tenth day, and the Trump administration began implementing large-scale permanent layoffs of federal employees.
○ This action broke the precedent of government "shutdowns" in modern U.S. history, marking an escalation in the standoff between President Trump and other Republicans against the Democrats.
● The reflection of macroeconomic data further intensified market concerns about the economic outlook:
○ The preliminary consumer confidence index for October from the University of Michigan was 55, the lowest since May.
○ Consumers expect prices to rise at an annual rate of 4.6% next year.
○ About 63% of respondents indicated they expect the unemployment rate to rise next year.
02 Market Structural Vulnerability: High Leverage as Amplifier of the Crash
Under the impact of macroeconomic black swans, the structural issues within the cryptocurrency market became amplifiers of the decline.
● An anonymous whale opened an $1.1 billion short position on Hyperliquid with a $30 million principal, and this massive bearish position played a role in exacerbating the market decline.
When the market began to turn, this whale took profits at the peak of the crash, doubling their principal in less than 20 hours, making a $30 million profit before quickly exiting.
● The high leverage characteristic of the cryptocurrency market triggered a chain reaction. Reports indicated that in extreme cases, $7.5 billion in crypto positions were liquidated within just 60 minutes.
This forced liquidation further depressed prices, creating a "downward-liquidation-further decline" death spiral.
● Bitcoin experienced a continuous decline with an average drop of nearly 1% per minute over 30 minutes, with the most extreme moment occurring at 5:19, when Bitcoin plummeted over 4% in that minute, dropping nearly $5,000.
03 Global Asset Chain Reaction: From U.S. Stocks to Cryptocurrencies
This wave of selling quickly spread from the U.S. stock market to various global risk assets, creating a true global panic.
● U.S. stocks faced a "Black Friday," with all three major indices plunging. By the close, the Dow Jones fell 1.9%, the Nasdaq plummeted 3.56%, and the S&P 500 dropped 2.71%.
● Major tech stocks in the U.S. also saw significant declines, with TSMC ADR dropping over 6%, Broadcom and Tesla falling over 5%, and Nvidia and Amazon dropping over 4%.
● Stock markets in several European countries also plummeted at the close, with the Euro Stoxx 50 index down 1.75%. Oil was also severely impacted, with WTI crude oil dropping over 4.24%, nearing its yearly low.
● Chinese concept stocks were similarly affected, with the Nasdaq Golden Dragon China Index falling over 6%, Futu Holdings dropping over 11%, NIO and JinkoSolar falling over 10%, Bilibili dropping over 9%, and Alibaba, Baidu, and Xpeng Motors all down over 8%.
Amid the panic, investors flocked to safe-haven assets like gold and government bonds, with spot gold prices rising over 1%, once again surpassing the $4,000/ounce mark. This flow of funds clearly indicated a sharp decline in market risk appetite.
04 Disasters and Opportunities: Liquidation Tragedy and Precise Harvesting
In this epic crash, market participants experienced vastly different fates. Over 1.6 million traders were liquidated, setting a record for cryptocurrency contract trading in the past decade. Major cryptocurrencies faced astonishing declines, while the altcoin market was in chaos.
Mainstream coin situation:
● ETH fell below the $4,000 mark, with a 20% fluctuation in 5 minutes;
● SOL had a daily decline of 14.81%;
● BNB's upward trend was broken, dropping to a low of $860.11, with a fluctuation of 33.33%;
● XRP had a 5-minute fluctuation exceeding 50%.
Altcoin situation:
● SUI plummeted from $3.5 to $0.55;
● WLD, the AI leader, dropped from $1.4 to $0.26;
● Even Dogecoin, among the top ten by market cap, saw a 50% decline.
● Small-cap tokens basically approached zero.
Popular coin situation:
● COAI had a 5-minute close of 5.71, with a fluctuation of 62.34%;
● XPL fluctuated over 70%;
● ASTER had a decline of 15.71%;
● ZEC and LTC also experienced significant fluctuations.
Meanwhile, those who had positioned themselves for shorting in advance became the beneficiaries of this disaster. The precise operations of that anonymous whale were just a microcosm of the few winners in the market. Before the crash, implied volatility across 14-, 30-, and 90-day expiries had surged to a 30-day high, indicating that traders were anticipating significant market volatility.
05 Market Outlook: Moving Forward Amid Uncertainty
This "1011" crash once again highlighted the vulnerability of global financial markets in the face of macroeconomic policy uncertainty. Looking ahead, the subsequent development of the market will depend on the evolution of several key factors.
● The follow-up progress of the trade war will become the most important barometer for the market.
Whether Trump's announced 100% tariff policy will actually be implemented and what countermeasures China will take will directly determine the direction of market sentiment.
● The resolution of the U.S. government shutdown and layoffs is also crucial.
If the political deadlock continues, it will not only affect the domestic economy but may further undermine global investors' confidence in U.S. assets.
● Changes in the leverage ratio of the cryptocurrency market are worth close attention.
The deleveraging process may continue for some time, and market volatility may remain high.
Looking back at history, every major market shock leaves profound lessons. The trade war conflict of 2018, the pandemic crash of 2020, and now the "1011" event repeatedly remind investors: maintain humility in the face of the market and vigilance in the face of risk. That anonymous whale who opened an $1.1 billion short position with a $30 million principal took profits at the peak of the crash, exiting with $60 million. Behind them are the wails of over 1.6 million liquidated traders.
A bull market is not a feast for everyone; the principal is the foundation for your survival in the market.
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