Anticipating the Aftermath of the Market Crash

Cause of the Crypto Crash: The recent crypto crash, with Bitcoin dropping below $105,000 and Ethereum falling over 20%, was primarily driven by extreme leverage, leading to a cascade of margin calls and panic selling across exchanges.

Market Stabilization Signs: Despite the turmoil, there are early indicators of stabilization as forced liquidations decrease and trading volumes normalize, although potential policy shocks could reignite volatility.

Lessons on Over-Leverage: The crash highlighted the risks of over-leverage and herd behavior in crypto markets, prompting a warning for retail investors to prioritize disciplined strategies over emotional reactions.

Nature of Crypto Volatility: The incident serves as a reminder that in the crypto market, fear and greed can shift rapidly, making stability a temporary and elusive state.