100,000 people were liquidated overnight: How the big dump in the US stock market triggered the crypto world

In the past 24 hours, the on-chain liquidation data is alarming — 230,000 investors were wiped out, with $1.024 billion evaporated. BTC fell from the $100,000 mark to 98,000, and ETH collapsed below 3100. However, the true culprit of this bloodbath may not lie within the crypto world itself.

Three consecutive falls in the US stock market, what is the driving force behind it?

The government shutdown has ended, Wall Street should have been cheering, but the Dow fell 1.65% and the Nasdaq plummeted 2.29%. Behind this seemingly contradictory trend lie three killer pieces of information:

Data Black Hole: Non-farm data and retail sales for September to October are all delayed. The Federal Reserve's expectation for a rate cut in December plummeted from 69% to 52%, leaving the market in confusion. Traders are forced to blindly reprice risk assets.

Inner Troubles of Tech Stocks: Alibaba's Tongyi upgrade and the impact of its open-source free model, while short sellers take the opportunity to hit the market before NVIDIA's earnings report. Meta, Oracle, and cloud vendors have successively revealed cash flow pressures, severely eroding the return on investment for American tech giants.

Bitcoin has become a subsidiary of the US stock market

The correlation between BTC and Nasdaq has soared to 0.8 - in simple terms, when the US stock market falls, coins fall even harder; when the US stock market rises, the rise in coins is relatively smaller. This pattern last appeared during the bear market of 2022.

Institutions are fleeing: Over the past month, $2.8 billion worth of spot BTC ETFs have been sold off, Grayscale Bitcoin Trust fell by 3.52% in a single day, and Ethereum Trust plummeted by 7.42%. The Coinbase premium index has turned green—indicating that American buyers are significantly selling off.

The Chain Reaction of Leverage Bubble Explosions

This crash is essentially a domino effect of leveraged liquidations. 90% of the liquidations are long positions being forcibly closed, with the largest single liquidation occurring in the HTX BTC trading pair. The collective massacre of 19 billion dollars at the beginning of October is still fresh in memory, and the market structure remains frighteningly fragile.

Where is the bottom? Three signals to keep an eye on.

Liquidity Aspect: The Federal Reserve may be forced to initiate temporary tools to inject liquidity, as a large amount of funds will be released after the fiscal restart.

Technical Analysis: The next support for BTC is at $93,000, whether it can hold will determine the subsequent trend. The 50-day moving average of the Nasdaq is also a barometer for global risk appetite.

Sentiment: The Fear and Greed Index needs to rebound above 50, and net inflow of stablecoins is a leading indicator.

What should we do now?

Aggressive Hand: Lightly enter a long position near 93000, set a stop loss below 90000. Focus on betting on BTC and ETH, stay away from altcoins.

Conservative: Lock in 50% cash and other right-side signals, and invest in mainstream coins to diversify risk.

Onlookers: Completely in cash, waiting for the Federal Reserve's December meeting to provide clear direction; the tech sector of the US stock market is the best leading indicator.

Will history repeat itself?

After the crash on March 12, 2020, BTC broke through its previous high in 278 days, soaring to $69,000 a year later. The question is — can you survive until tonight? When liquidity eventually returns, the most painful thing is not being trapped, but having no chips in hand. The next two months will be the golden pit period, and the current task is to survive and prepare for what’s coming.