Bitcoin's three dramatic days: the liquidation wave behind the $3,000 volatility and market fragility

【Crypto World】Last week’s Bitcoin market can be described as a “roller coaster.” Within just a few hours, the price once broke through the $90,000 mark, soaring over $3,000, only to rapidly plunge back to around $86,000. This bizarre fluctuation seems sudden, but in fact, it is driven by market mechanisms behind the scenes.

First, the chain reaction caused by short positions being liquidated. Approximately $120 million in short positions were forcibly closed, pushing the price sharply higher. But extremes often lead to reversals, and the subsequent crash wiped out over $200 million in long positions. Two rounds of liquidations unfolded in succession, exposing a painful issue in the current market: high leverage combined with low liquidity makes the entire market structure extremely fragile.

In such an environment, any small movement can easily trigger a chain reaction of liquidations. For traders, reducing leverage and controlling positions are the keys to survival. The market is always testing participants’ risk awareness.