'1011 Crash' One-Year Retrospective: Crypto Market Risks Persist, Investors Need to Reasonably Control Leverage

BlockBeats news, October 10 — One year has passed since the "1011 crash," when Bitcoin, shortly after hitting an all-time high of about $126,000, rapidly fell from around $122,000 to $105,000, triggering an epic liquidation of about $19 billion in the crypto market. On this anniversary, institutional analysts are once again reviewing and summarizing the impact and lessons of the "1011 crash" on the crypto market.

Mark Connors, head of Risk Dimensions, said the market top formed extremely quickly at the time, with open interest near historic highs and a large number of traders betting that Bitcoin would continue its four-year cyclical uptrend, ultimately leading to losses when the market reversed. Therefore, the "1011 crash" was mainly driven by the derivatives market rather than changes in on-chain demand, showing that leveraged positions can still dominate Bitcoin price movements in the short term. He said that leveraged trading such as perpetual contracts is still prevalent, and the market still has the foundation for another similar crash.

Chris Sullivan, co-founder of Hyperion Decimus, advised traders to reduce leverage and pay attention to indicators such as open interest, funding rates, and market sentiment to identify the risk of excessive one-sided bets in the market. Connors also said that investors' understanding of market structure has improved, but the effectiveness of Bitcoin's "four-year cycle" as a price prediction indicator is declining, and macroeconomic and political factors may play a greater role. (CoinDesk)