## Bitcoin "Hype Bubble" 72% Price Drop: A Costly Lesson on Market Liquidity

Early morning on 12/26/2025, the cryptocurrency market witnessed a surprising event when a small retail trading pair caused a significant shock. Bitcoin (BTC), at that time maintaining a price around $87,500, suddenly plummeted to $24,000 within seconds. This drop corresponds to a volatility of 72% of its value, raising serious questions about the stability of the newly emerging stablecoins on the market.

## Shocking Numbers: From Peak to Abyss

According to recorded data, BTC's price experienced an unimaginable fluctuation. In a very short time frame, it surged from around $87,611 down to $24,111. This was not a normal correction but a "shock" at a micro level, occurring only within a specific trading pair.

Fortunately, this event lasted only a few seconds. Buying pressure at the bottom or automated trading bots quickly activated, pushing the BTC price back up to around $87,500. Everything happened so fast that manual traders couldn't react in time.

## Cause: Not a Global Collapse

It is important to clarify that this volatility was localized. Major trading pairs like BTC/USDT or BTC/USD on large exchanges continued to operate normally, with no abnormal activity recorded.

The epicenter of the incident was in the BTC/USD1 pair. USD1 is a newly issued stablecoin, introduced with a powerful name to affirm its value. However, despite being announced as solid, this stablecoin has not yet accumulated sufficient depth of liquidity on exchanges.

When a large market sell order or liquidation chain was triggered, it "swept away" all buy orders at the $87,000 level. With no liquidity support, the price had to slide down to lower levels to find buying interest, eventually hitting a bottom at $24,111. This is a typical "wick" (candlestick wick) phenomenon caused by low liquidity.

## Lessons from the Past: The 10/10 Crisis

Today’s incident is not new; it is a smaller version of what the market experienced before. More than two months ago, on the evening of 10/10/2025, the crypto market was deep in red.

At that time, international trade policy news triggered a global sell-off wave. Bitcoin dropped sharply from $120,000 to $102,000, dragging the entire altcoin market into crisis. Over $19 billion in long orders were forcibly liquidated, affecting about 1.6 million investors worldwide.

The brutality of 10/10 also lay in its contagion: not only Bitcoin but the entire altcoin market was submerged in blood, with many tokens losing all value overnight. Some smaller exchanges had to temporarily halt operations to control systemic risk. The shock was so severe that some major organizations had to launch huge support packages worth hundreds of millions of USD to restore confidence.

## Analysis: Technical Accident or Major Warning?

From a technical perspective, today’s event is more of a "micro-structural accident" rather than a trend indicator. Market-savvy traders know that incidents like misquoting, trading bot errors, or sudden price gaps are inherent risks, especially with new assets or trading pairs.

However, this incident also highlights a concerning issue: liquidity risk of emerging stablecoins. Despite promises of stability, these stablecoins still need significant time to build genuine liquidity depth. Trading on thinly traded pairs is like walking on a tightrope without a safety net—small shocks can cause major damage.

## Current Market Data

According to the latest update, Bitcoin (BTC) is trading around $90,190 with a 24-hour change of -0.09%. This price indicates that the market has stabilized again after the strange fluctuations.

## Risk Management Lessons

The event on the morning of 12/26 concludes with Bitcoin returning to its normal trajectory, as if the 72% crash never happened. But for those who placed automatic Stop-loss orders or used high leverage on the BTC/USD1 pair, the losses are real and significant.

The cryptocurrency market in 2025, despite having clearer regulations, still harbors many surprises. The main lessons from today’s incident are:

**First:** Not all exchanges or trading pairs are equally safe. Liquidity is the decisive factor for survival during volatile moments.

**Second:** A project’s reputation is not equal to the depth of its order book. Always check liquidity depth before investing, even if the project has familiar names.

**Third:** Prioritize trading pairs with abundant liquidity on reputable exchanges. For new trading pairs, be cautious, especially when using leverage.

Smart investors don’t just look at price trends but also understand market structure and hidden risks. Today’s event is a stark reminder that in the crypto market, caution and knowledge are the most valuable assets.