When the price of Bitcoin hit a low of $93,000, the market did not witness a frenzy; instead, it saw nearly 220,000 traders' accounts instantly wiped out. This was not a simple price correction, but a structural stress test that brutally divided the crypto world into two parallel universes: one belonging to retail investors who were liquidated due to leverage, and the other to institutions calmly accumulating assets. The core of this event was not the price number itself, but the power shift it revealed—an era driven by retail sentiment was hastily coming to an end, and a new cycle dominated by institutional capital and cold rules had already begun.
The Full Picture of the Slaughter and the Focus of Conflict
The trigger for the event was Bitcoin's price falling below the critical psychological and technical barrier of $93,000. At some point in late November 2023, the breach of this price was like knocking over the first domino. Highly leveraged long positions were forcibly liquidated by the system, causing a surge of selling pressure to flood the market, leading to further price declines and triggering more and larger-scale liquidations. This chain reaction swept through the entire market in a short time, forcing nearly 220,000 traders out.
On the surface, this was a typical market panic. However, the core conflict was far deeper than price fluctuations. It was a zero-sum game centered around "liquidity" and "risk pricing."
On one side were retail investors who heavily relied on leverage and chased short-term volatility. They placed their hopes on the continuous rise of the market, using borrowed funds to amplify their expected returns, while also magnifying their own risk exposure. When the market reversed, they had no buffer zone and could only passively accept the fate of system liquidation, becoming fuel for the market's decline.
On the other side were institutional investors with deep capital and a long-term perspective. They viewed such leverage-driven crashes as "noise" and excellent opportunities to build positions. At the moment when retail investors were forced to sell, institutions were precisely the ultimate buyers of these cheap chips. The Bitcoin ETF mentioned in the briefing still recorded a net inflow of $58.5 million during the same period, serving as cold evidence: while retail investors were bleeding, institutions were methodically accumulating assets.
Players at the Table
The reshuffling triggered by the $93,000 crash clearly outlines the circumstances and gains and losses of three types of players.
Liquidated Retail Investors: They were the biggest losers in this storm. Driven by community sentiment and the desire for quick wealth, they used high-leverage contracts as their tools. Their understanding of the market was limited to price fluctuations, overlooking the more complex liquidity structure and risk mechanisms behind it. When a black swan event occurred, their accounts were the first to be sacrificed.
Calm Institutional Buyers: They were the winners of this game. Their decisions were based on macro analysis, long-term value judgments, and strict risk management. They did not participate in short-term price gambling but entered the market through compliant, low-risk channels like spot ETFs when panic was extreme and liquidity was most abundant (i.e., when selling pressure was highest). The liquidation of retail investors provided them with the opportunity to acquire large Bitcoin positions at a lower cost.
Invisible Intermediaries: Trading platforms and market makers were the "dealers" who profited from this chaos. Whether the market was rising or falling, extreme volatility meant higher trading volumes and fee income. More importantly, the operation of the liquidation engine itself was a highly profitable business. They provided leverage tools and enforced liquidation rules, calmly extracting their share of commissions from this violent transfer of wealth.
Leverage Meat Grinder and Spot Vacuum Cleaner
To understand the mechanics of this storm, one must grasp two core tools: leveraged contracts and spot ETFs.
Leveraged contracts are essentially a financial amplifier. They allow retail investors to control trading volumes far exceeding their principal with a small margin. This design can create astonishing returns in a bull market, but in a downturn, it becomes an efficient "meat grinder." Once the price falls below the maintenance margin level, the system automatically and ruthlessly sells positions to repay debts. This forced selling pressure, regardless of cost, is a major driver of price flash crashes and waterfall declines.
In contrast, the spot ETF favored by institutions acts like a "vacuum cleaner." Institutions buy Bitcoin through ETFs, corresponding to the purchase and custody of an equivalent amount of Bitcoin in the real market. This buying behavior is "net inflow," which withdraws liquidity from the market and provides real support for prices. Unlike contract trading, spot holders are not forced to liquidate due to short-term price fluctuations. They can endure longer periods of unrealized losses, waiting for the market cycle to return.
When the retail investors' leverage meat grinder goes into overdrive due to price declines, creating a large number of bloodied chips, the institutions' spot vacuum cleaner begins to work, transferring these chips from the panic-stricken to long-term holders. The coexistence and interaction of these two mechanisms constitute the brutal and real ecology of the current crypto market.
The Essence of Paradigm Shift
The $93,000 crash event has profound significance as it marks a paradigm shift in the crypto market. In the past, the dominant narrative of the market was determined by retail investors' FOMO (fear of missing out) sentiment, and price surges and drops were often directly related to community enthusiasm. However, now, the pricing power of the market is increasingly shifting towards institutions.
This means that the logic of market volatility is changing. The irrational boom driven by retail sentiment is being replaced by rational calculations based on macro liquidity, interest rate expectations, and cross-asset allocation by institutions. The "liquidity tightening" background mentioned in the briefing is a key macro factor for understanding this event. In an environment of tightening liquidity, high-risk, high-leverage strategies become exceptionally fragile.
The community discussion that "retail is dead, institutions should rise" may be somewhat exaggerated, but it accurately captures this structural change. Retail investors have not truly "died," but their previous simple and crude methods have become ineffective. If they cannot adapt to this new game deeply participated in by institutions, they will repeatedly become targets for harvesting.
Insights and Projections
This event has taught all market participants a heavy lesson and outlined several clear trajectories for the future.
First, for retail investors, the era of blindly using high leverage is over. In a market where institutions are the main counterparty, risk management capabilities will replace "faith" as the primary element of survival. Reducing leverage, focusing on spot assets, and understanding macroeconomics will be the necessary path from "gambler" to "investor."
Second, the market will undergo more similar but possibly smaller-scale "de-leveraging" processes. The continuous inflow of institutional capital will gradually solidify the price bottom of the market, but before that, any bubbles built up by leverage will be ruthlessly punctured. This periodic cleansing will become the norm in the market.
Finally, the attributes of Bitcoin and mainstream crypto assets are undergoing fundamental changes. They are gradually transforming from high-risk speculative products into alternative allocations on institutional balance sheets. This means that their price fluctuations will increasingly synchronize with traditional financial markets, rather than being isolated digital frenzies. Understanding Bitcoin will require us to step out of the crypto-native bubble and examine it with a broader global macro perspective.
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