Review of the first anniversary of the "1011 crash": The risks in the crypto market have not disappeared, investors need to reasonably control leverage

A year ago, on October 10, the crypto market experienced a violent shock known as the "1011 crash." At that time, Bitcoin had just exceeded an all-time high of $126,000, and immediately fell sharply from a high of $122,000 to $105,000, triggering an epic liquidation of about $19 billion. At this anniversary, institutional analysts re-examine the market impact and profound lessons brought by the incident.<br /> <br /> Mark Connors, head of Risk Dimensions, pointed out that the market tops were formed extremely quickly when the crash occurred, and the volume of open interest contracts was close to historical peaks. A large number of traders made leveraged bets based on expectations of Bitcoin's four-year rise cycle, and the market reversed, resulting in severe losses. He emphasized that the core driving factor for the plunge came from the derivatives market, rather than changes in demand on the chain, indicating that leveraged positions can still dominate price fluctuations in the short term. It is worth noting that he also said that leveraged trading instruments such as perpetual contracts are still the mainstream of the market, and the market structure still has the basic conditions for recurrence of similar violent fluctuations.<br /> <br /> Chris Sullivan, co-founder of Hyperion Decimus, advises traders to reduce leverage and closely monitor key indicators such as open interest contracts, funding rates and market sentiment to prevent the risk of excessive unilateral bets. Connors added that while investors 'awareness of market mechanisms has improved, the effectiveness of Bitcoin's "four-year cycle" as a price prediction model is weakening. The current macroeconomic environment and political factors may become more important variables affecting price trends.（CoinDesk）