All of cryptocurrency market is savagely mauled and bleeding right now after what is described this as “the largest liquidation event in crypto history. This is the most blood in the streets for years, if you ask me, and for like ever, if you ask other more expert analysts.
Over the past 24 hours, bets worth more than $19 billion have been wiped out, and more than 1.6 million traders liquidated, according to Coinglass data.
More than $7 billion of those positions were sold in less than one hour of trading on Friday. I know most people are saying that it was triggered by Trump lashing out with more tariffs on China, as China suddenly reversed it's friendly trade policy with USA.
Apparently President Xi of China is in a death match for his position as leader of the party and therefore his faction has pulled out the desperation bombs. They radically reversed their pro-USA policy really suddenly because Xi is about to be taken out.
In order to not go down easily, President Xi is causing chaos in foreign trade affairs. The idea is that the chaos will bring the whole CCP down with him by antagonizing President Trump, coaxing him to react badly toward China. These death defying attempts by the Xi faction have now pulled the whole global economy into turmoil. Mostly affecting high risk markets like crypto.
whether Xi will survive is anybody's guess, but the move, coming just days before China's big political plenum, shows that Xi is desperate and using some kind of Samson Directive, as Israel would call it. It could destabilize Xi's internal enemies and give him an advantage. Or it could blow up in his face or it could destroy peace and lead to the fabled war with China.
It caused Trump to react by placing massive tariffs on China, who themselves have restricted the export of certain rare earth metals. And we all know that everyone interested in AI or innovative tech, desperately need those rare earth metals, for things like micro-processors that run bitcoin miners and AI data centers. China has a big monopoly over some of these metals, so they have the world in a tight grip.
The result of all this trade spat, is that crypto took a big knock. Bitcoin oracle markets, like Chainlink and Pyth, started mispricing the asset. Leveraged or margin open positions by high risk traders were all liquidated. Mostly longs, and at this time in the four year bitcoin cycle, most of us are bullish as anything. This is supposed to be Q4 the year after the halving. This is where Bitcoin traditionally goes to the moon and to new all time highs. And it takes altcoins with it.
Granted, Bitcoin has indeed just made a new all time high this week. Yet altcoins are still in the gutter. And now they are under the gutter, in the sewer. What a crash. Some lost 30% and some even lost 50% of their value just like that, in hours. Many alts made an attempt at a V-shaped recover, following bitcoin, and it was only one big red 4hour candle. Actually on some charts you could see a big red 30min candle, and that was it. Price bounced back. But it didn't bounce all the way back. It currently hovers below the usual moving averages. It looks dire for most people's portfolio, if you held altcoins.
I won't go into the details of the way in which the market technically collapsed in a cascade of liquidated leverage trades, and you can research that yourself if you are interested. I simply write and post this blog today to diarize and record the journey, especially by noting the big historic events that hit the crypto market. And this is one of the biggest in history.
I'm hoping this is a normal 30% correction on the way to the moon, that this is the dip before the moonshot. Now is the time. These dips are not too unusual. If not then the top may already be in and we are left holding the bag as the multi year bear market ensues. Somehow I don't think so. There is still hope, although aw we know, hope is not a strategy.
Chart from Tradingview.