Why is the "epic" deleveraging on Oct 10 and 11 inevitable? - Altcoins' liquidity primarily comes from funds within the crypto market. The persistently high interest rate environment makes it difficult for the altcoin market to obtain more liquidity. The cycle transitions of the ECB and BOJ are further shrinking the available offshore liquidity, prompting investors to concentrate their funds in high-liquidity assets rather than low-liquidity assets. - April's "Liberation Day" caused the US stock market to crash. To stabilise the stock market and meet the needs of the future OBBBA bill, the Trump administration asked for significant interest rate cuts from the Fed, but the request was rejected. Therefore, the Trump administration instructed Bessent to inject short-term liquidity into the market by significantly increasing the issuance of T-bills. - Unlike 2021, current liquidity is primarily financed by T-bills rather than T-bonds & T-notes. The scale of liquidity has increased rapidly, but its quality has deteriorated and its duration has shortened, fueling speculation and significantly increasing liquidity volatility. - To quickly profit and exit, whales used massive amounts of leverage (including perps, DATs, etc.) to drive and even manipulate market trends, leading retail investors to follow suit and speculate. This rapidly increased market leverage and significantly increased vulnerability. - While institutional investors sought stability, they also sought high returns. Interest-earning strategies based on assets like USDe were leveraged through "staking token loans" and other means, further weakening the market's overall resilience to risk.(BloFin Academy)