During the New Year's Eve of 2026, the crypto market experienced a severe correction. Bitcoin rapidly dropped from a high of $126,000 to $87,000, resulting in 164,000 accounts being liquidated, involving a total liquidation amount of $121 million. Among these, 106,000 traders had their positions completely wiped out, with average losses only in the thousands—these were not institutional whales, but ordinary traders who used their year-end bonuses or even mortgage funds to engage in leveraged trading.

Data reveals a phenomenon: 85% of the accounts that were liquidated held less than 1 BTC. Most of these traders believed in the notion that "5x leverage can double profits," but ignored a fact—institutional investors had already quietly adjusted their positions. Major funds like Grayscale showed obvious changes in their holdings, and a leading investment bank downgraded its recent outlook ratings. Meanwhile, derivatives trading volume surged to 72%, while spot market depth was insufficient, and this structural imbalance itself planted the seeds of risk.

From the price peak to liquidation triggers, a domino effect was evident. Retail traders experienced a process of adding to their positions—covering→adding→ultimately being liquidated—during the decline. When signs of a rebound appeared, trading volume was halved—no one dared to buy the dip, and the market fell into a strange silence.

Returning to a fundamental question: high leverage is essentially a synonym for high risk; high returns are often just a probabilistic illusion. When the next market rally arrives, how much volatility can your account withstand? Perhaps this correction is the market's most direct way of providing an answer.