Cryptocurrency Market Plunges Collectively, Over 200,000 People Liquidated, Bitcoin Falls to $68,100

How does high leverage in AI trigger a death spiral in the cryptocurrency market?

Reporter | Li Yutong, Feng Zitong

Editor | Jiang Peixia

As threats and conflicts escalate between the United States, Israel, and Iran, cryptocurrencies decline again.

As of press time, major cryptocurrencies have collectively fallen sharply, with Bitcoin dropping over 3%, approaching $68,100, and Ethereum falling over 4%.

CoinGlass data shows that in the past 24 hours, over 200,000 people worldwide have been liquidated, with a total liquidation amount of $555 million.

Since the U.S.-Israel attack on Iran in late February, Bitcoin briefly broke through the $75,000 mark, but by March 23, it had retraced nearly 10%. Why, under geopolitical conflict, is Bitcoin not being sought after but instead experiencing a flash crash?

Experts analyze that multiple factors are at play. Li Ming, researcher at Hong Kong Polytechnic University and executive president of the Hong Kong Web3.0 Standardization Association, told 21st Century Business Herald that in emergencies, some people need to sell Bitcoin for fiat currency to buy tickets or daily necessities; rising oil prices also prompt some groups to sell assets for liquidity. More critically, the high leverage in the derivatives market has triggered a “death spiral,” where selling by some causes prices to fall, leading to massive margin calls and forced liquidations, further increasing selling pressure.

Professor Zhao Binghao, director of the Fintech Legal Research Institute at China University of Political Science and Law, commented that “these movements are hard to explain as traditional ‘safe-haven assets,’ but rather resemble typical ‘risk assets being deleveraged.’” That is, high-leverage positions are forcibly closed, liquidity layers cause stampedes, and funds retreat into cash or short-term bonds. Wang Lixin, founder of Carbon Chain Value, offers a more direct assessment: “It reveals the true nature of high-beta global liquidity assets.” 【Details】

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(Note: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.)

Produced by | 21 Financial Client, 21st Century Business Herald