Retail Investors Hit Hard: When Earnings Bombs Meet Crypto Crashes

Wednesday was brutal for the retail crowd. The market just delivered a reminder that buying the dip doesn’t always work out.

What went wrong:

Two things collided at once. Palantir dropped nearly 8% after earnings despite solid Q3 numbers—turns out the market hates sustainable growth narratives when valuations are already 150% up. Then Michael Burry, the “Big Short” guy, filed 13F docs showing he’s heavily short on Palantir and Nvidia. That’s the moment panic selling kicked into high gear.

But the stock rout was just half the damage.

Crypto got absolutely wrecked:

Bitcoin plummeted through the $100K level for the first time since June, hitting $99,932 before bouncing slightly. That’s a drop big enough to trigger the second-largest single-day decline of the year. Ethereum followed suit, diving over 10% to $3,225.

The real carnage? Across all exchanges, 342,000 traders got liquidated in 24 hours. Total liquidation volume: $1.3 billion. And here’s the kicker—85% of those were long positions getting wiped out.

The numbers tell the story:

Goldman Sachs’ retail investor concentration index plummeted 3.6% that day—three times worse than the S&P 500’s decline. Even at market open, retail was still net buying $560M in stocks (JPMorgan data), but the buying power couldn’t hold the line.

What’s next?

Market sentiment? Tense. The crypto situation isn’t far removed from the liquidity crisis three weeks ago. Traders are now split: either prep a shopping list for the next bounce or sit in cash and wait it out.

The lesson here isn’t new, but it hits different when it’s your portfolio: leverage + bear pressure + negative catalysts = a very expensive Tuesday.