What Happened?
$BTC $SOL $PAXG Imagine a row of dominoes. In the crypto or stock market, many traders use leverage (borrowed money). When the price drops even a little, their accounts get closed automatically by the exchange. This is a liquidation.
Because over $650 million was wiped out in just one hour, the "dominoes" fell so fast that the price didn't have time to recover. It just kept crashing to find the next "stop" (the next person forced to sell).
Why did it crash?
Too many people borrowed money: Everyone was betting the price would go up. When it went down instead, they were forced to sell.
Bad News (Macro): Big economic changes (like the Federal Reserve keeping interest rates high) made investors scared.
No Buyers: Usually, people buy the dip. But during a "liquidiation cascade," there aren't enough buyers to stop the fall. It's like falling through an air pocket.
Computers took over: Once certain price levels broke, trading bots (algos) started selling automatically, making the crash worse.
What should you do?
This post is giving a "Survival Guide" for traders:
Don't jump in yet: Don't try to "buy the dip" while the price is still crashing (don't catch a falling knife).
Don't "Revenge Trade": If you lost money, don't try to win it back immediately by taking bigger risks. You will likely lose more.
Wait for calm: Let the "blood" stop flowing. Wait for the price to stay steady (build a base) for a few days before buying.
Cash is safe: Sometimes, holding onto your cash and doing nothing is the smartest "trade" you can make.
The Bottom Line: The market is currently in "Panic Mode." It's better to miss the bottom than to lose everything trying to find it.