This is an extremely bloody weekend.
On one hand, Yi Lihua's institution Trend Research had a $700 million ETH position on Aave that was forcibly liquidated; on the other hand, gold has reached $5000, and silver has recovered to $80.
This is probably the market's most cruel 'bottom signal'.
The elderly Yi Lihua, who has gone through several rounds of bull and bear markets, ultimately perished due to overly confident cyclical borrowing. His liquidation does not signify the end of the market, but rather the extreme release of panic emotions.
Although the most stubborn bulls ultimately couldn't hold out and were forced to cut their losses, this does not mean that the short-selling momentum has completely exhausted. The cryptocurrency market has entered a bear phase, and price fluctuations will be very intense. During this phase, it's essential to minimize observation and increase activity to protect the principal.
The most intuitive thing is the macro economy; the violent rebound of gold and silver already indicates that money has not disappeared, it is just in extreme risk aversion.
In the current market, technical analysis has already failed. This is the final phase of washing out human nature; when the chips of large players and institutions are completely washed out, we may see the real bottom. The exit of big players is usually a precise contrary indicator.
I actually think that Yili Hua this time did not lose due to misdirection, but rather due to the choice of tools. It died from the on-chain liquidation mechanism of DeFi. The looped collateral on Aave is actually a double-edged sword; once the volatility amplifies, there is no time to replenish the collateral.
So during price fluctuations, it's best to avoid contracts and leverage as much as possible. A moment of carelessness can be fatal.
