This morning, the cryptocurrency market experienced severe volatility, with multiple major assets quickly declining in the short term. Against the backdrop of unexpected changes in overseas macro trade policy expectations, major global markets closing for holidays, and the key personnel expectations of the Federal Reserve, liquidity faced severe tests.
Why does a 'flash crash' always happen at specific times? Behind this is not some metaphysical explanation, but rather the resonance of three core financial logics:
1. Why does the 'curse' always erupt at 8:00 (UTC+8)?
This is closely related to the unique trading rules of the cryptocurrency market:
Funding rate settlement: Perpetual contracts on mainstream exchanges are usually settled at 08:00 Beijing time. During strong bullish sentiment, the repositioning and liquidation actions at the moment of settlement can easily trigger liquidity crunches.
Daily level line change: 8:00 is exactly UTC 0:00. Quantitative strategies and technical indicators across the network complete their closing confirmations at this moment. Once the price breaks below key daily support, systemic stop-loss orders can be triggered in a chain reaction.
Liquidity vacuum period: At this time, U.S. stocks are in a market closure phase, overseas institutional capital activity is low, and the Asian market has just opened, making market depth the thinnest. At this point, a small sell order can create a massive price drop.
2. Macroeconomic changes: The 'safe haven divergence' between gold and crypto assets
Recent overseas trade regulations and tariff expectations targeting specific regions have triggered global market concerns about 'supply chain tightening'.
Safe asset path: In the face of macroeconomic uncertainty, traditional funds currently prioritize flowing back to gold and other precious metals, driving up gold prices, with XAU (gold) and XAG (silver) reaching new highs.
Risk asset attributes: Although we expect BTC to have safe-haven properties, it is still viewed by large institutions as a 'high beta risk asset' under extreme news shocks. Especially during liquidity depletion periods caused by holiday market closures, the crypto market often becomes an outlet for emotional release.
3. The essence of holiday 'flash crashes': Leverage cleanup
Lack of support: Affected by overseas commemorative holiday, related ETFs and institutional capital channels are suspended from inflow, leaving the market lacking sufficient buying support.
Bullish liquidation: The market has accumulated excessively high bullish leverage. When sudden macro 'black swan' events disturb sentiments, even a small decline can trigger a chain liquidation, resulting in a rapid 'spike' for a short time.
⚠️ Risk control: How should we deal with ourselves?
In the face of extreme volatility, maintaining rationality is more important than predicting market trends:
Stay away from high-leverage contracts: During periods of frequent policy disturbances, high leverage has a very low tolerance rate in front of the '8 o'clock line change'.
Respect short-term uncertainty: Macroeconomic expectations (such as interest rate trends, personnel changes) are difficult to predict. Do not blindly catch falling knives; strictly control positions to ensure you can stay in the game.
Adhere to value logic: Severe volatility is the norm for digital assets and the source of excess returns. Only by reducing leverage, focusing on long-term fundamentals, and holding truly valuable currencies can one survive the storm until 'spring blossoms'.
How does everyone view the impact of the new round of macro fluctuations on the market? Is this pullback a risk or an opportunity? Feel free to share your thoughts in the comments.
Risk warning: Trading digital assets carries extremely high risks and is greatly influenced by global policies and macroeconomic environments. The content of this article is for learning reference only and does not constitute any investment advice. Please participate rationally, illegal financial activities are prohibited, investment involves risks, and one should be cautious when entering the market.
