Markets are all screaming, but looking at the data, you'll find that things might not be as bad as they seem.

This recent wave of market movement has been intense. In just 41 days, the total crypto market cap evaporated by $1.1 trillion, equivalent to a daily net outflow of $27 billion. Bitcoin has fallen 25% in a month, and Ethereum has dropped up to -35% since early October. The Fear Index has already soared to "Extreme Fear," and the overall market sentiment is icy cold.

But here’s a critical question: what is the real culprit?

**Leverage Liquidations — The Misunderstood "Main Cause"**

Simply put, this decline isn’t due to a fundamental breakdown, but rather a domino effect caused by excessive leverage. With 100x leverage, a mere 2% price fluctuation can trigger a liquidation. Imagine millions of traders playing this game simultaneously—any slight movement can trigger a chain reaction.

On October 11th alone, the liquidation amount reached $19.2 billion, setting a record for Bitcoin’s single-day $20,000 drop. Over the past half month, there have been three days with single-day liquidations exceeding $1 billion, and $500 million liquidations have become commonplace. This leverage pressure makes the market extremely sensitive, especially when liquidity is already tight—any small fluctuation can amplify into a crash.

**The Fundamentals Are Not That Bad**

Peel back the layer of leverage hype, and you'll see that the fundamentals of the crypto market haven't actually deteriorated significantly. Institutional adoption continues to accelerate, and the policy environment is improving. These are the true long-term supports.

The short-term wave of liquidations simply clears out those over-leveraged traders, allowing the market to self-clean. Those with firm conviction are now opportunistically accumulating at low levels. That’s why, historically, every time there’s extreme panic, a rebound follows — it’s not coincidence, it’s a pattern.