# Don't panic during the big dump! This is the normal rhythm of a bull run.

> On one side, more than 1.6 million people are liquidated, while on the other side, the big shots are calling for a bottom-fishing. The market keeps cycling between fear and greed.

Last night, the cryptocurrency market experienced a thrilling big dump, with Bitcoin leading the plunge, followed closely by mainstream coins like Ethereum and BNB, while various altcoins suffered greatly.

Hundreds of billions of dollars evaporated in just a few hours, panic spread through various groups, and many people were asking: "Is the bull run over?"

But in my opinion, this **is just a normal pullback in the bull run**. Just like a person needs to catch their breath when they get tired, the market needs to take a break after rising too much.

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## 01 Market Panic

**The culprit of the big dump is the liquidation of leveraged funds**

The big dump came suddenly but was not unexpected. In the past 24 hours, the cryptocurrency market has experienced a widespread fall, with Bitcoin plunging nearly **15%**, dropping from the position of $122,000 to $103,900.

Ethereum has fallen even more severely, plunging from $4363 to $3468, a drop of more than **20%**. Other smaller-cap cryptocurrencies are in even worse shape, with Cardano and Dogecoin both falling over 20%.

The big dump led to over 1.6 million people being liquidated, with the total liquidation amount across the network reaching **$19.141 billion**, setting a new historical record for cryptocurrency contract trading in the past ten years.

Both the amount and the number of people can be described as an "epic big dump" in the cryptocurrency market.

The direct reason is that the market was too hot recently, and many people borrowed money to leverage and chase the rise. When the price fell below a key position, these leveraged positions were forced to liquidate, triggering a chain reaction that led to a short-term liquidity drain.

The founder of Liquid Capital, Yi Lihua, pointed out that in addition to macro factors, "the continuous fall of altcoins in the crypto space and the MEME frenzy drawing away liquidity" is also one of the factors.

## 02 Historical Patterns

**Pullbacks are part of a bull run**

For seasoned investors who have experienced multiple bull and bear markets, such a sharp fall is not unfamiliar. **Adjustments in a bull run are not exceptions, but the norm**.

Historical data shows that during each super bull run, at least **30%-40% of the time** is in an adjustment state.

For example, during the structural bull run in 2020, the market experienced a weekly adjustment of 8%; the bull run from 2014 to 2015 had three instances of a 10%+ big dump. Adjustments are not a signal that the bull run is over, but rather a necessary phase for the market to gather strength.

"There is an unconventional rule for bull market adjustments: **the shorter the time, the greater the magnitude**."

As the bull run progresses, adjustments will show a "short but fierce" characteristic - the earlier adjustments may last for 2-3 weeks with a magnitude of 10%-15%; by the mid to late stage, the adjustment time shortens to within 1 week, but the magnitude may soar to 20%.

It seems more frightening, but in reality, it is a quick capital washout. Once the washout is complete, it will soon reach new highs, and those who panic and cut their losses often miss the main upward trend.

## 03 Performance Differences

**Mainstream coins are completely different from altcoins**

Although the overall market experienced a big dump, the performance of different cryptocurrencies varies significantly.

Although Bitcoin has fallen, it is still relatively resilient compared to other coins. Now that Bitcoin has ETF funds supporting it and higher institutional participation, this decline resembles a short-term panic sell-off rather than an issue with the fundamentals.

Ethereum falls harder than Bitcoin, and that's normal. Ethereum has always been more volatile, leading the charge when it rises and also taking the brunt when it falls.

But this does not affect its long-term value; instead, it brings the price back to a more reasonable range.

BNB has shown resilience as a platform coin. The Binance ecosystem is still operating normally, with various airdrops and projects continuing to progress. These types of assets with practical use tend to rebound easily after a fall.

The worst hit are the altcoins, with many coins experiencing a fall of over 60%.

Kyle, a researcher at DeFiance Capital, stated: "Altcoins are clearly repeating the same tragedy - although I have repeatedly warned over the past few months, I never expected it to be this severe."

## 04 Big Boss Perspective

**Some are in panic, while others see an opportunity**

In the face of this historical big dump, the opinions of market moguls vary.

CZ retweeted relevant views on social media, suggesting that this could be a similar **buying opportunity** as during the COVID period.

The founder of Liquid Capital, Yi Lihua, is relatively cautious, stating that the institution **has not yet bought the dip** and needs to patiently wait for the situation to clarify.

Former FTX community partner Benson Sun analyzed that this round of deleveraging can be called "the most thorough one in the cycle." The market bubble has been completely squeezed out, and risk leverage has returned to zero.

He remains optimistic about the trend in the fourth quarter and will spend about a month executing a phased investment strategy.

Crypto analyst @ali_charts warns to be cautious, pointing out that "such large-scale liquidations often signal a change in market structure, rather than a temporary fall."

## 05 Mindset Management

**Avoid being the 90% in panic**

During the adjustment of the bull run, 90% of people fail because they are "afraid of adjustments". The common mistake they make is to sell off after a 5% fall, mistakenly thinking that "profit taking" is the same as "reaching a peak".

Many people have not experienced a complete bull run, and when they see their accounts showing a floating loss of 5%, they panic, thinking "the bull run is about to end." After gritting their teeth and cutting their losses, they want to wait for a pullback to re-enter, but the index reaches new highs in just a few days, and the stocks they held rise along with it, leaving them watching helplessly as they miss out.

In fact, during a bull run, adjustments usually fall **10%-15%** before rebounding. Cutting losses and leaving the market turns "unrealized losses" into "real losses."

Cryptocurrency researcher Haotian expressed his concerns: "The black swan event of 1011 has made me, an originally optimistic industry observer, feel a hint of despair."

He is worried that the "Three Kingdoms Kill" situation in the crypto industry—exchanges monopolizing profits, Wall Street accurately harvesting, and retail tech enthusiasts being double killed—could lead to a "catastrophe for the past Crypto cyclical gameplay."

## 06 Survival Rules

**Hold your chips, wait for dawn**

In the cryptocurrency space, the key is not to predict the market, but to **stay calm**. During a big dump, when others panic and cut their losses, it is often an opportunity for smart people to accumulate in batches.

Looking back at the two big bull runs in the past 10 years: during the 2014-2015 bull run, the index rose from 3000 points to 5178 points after 3 adjustments; during the 2020 bull run, the ChiNext index rose from 2600 points to 3576 points after 2 adjustments.

Every time there is an adjustment, someone shouts "the bull run is over", but in the end, they are proven wrong. Those who cut their losses can only watch as others earn more after the adjustment, while they stand on the mountain top regretting it.

Shenzhen Linyuan Investment Chairman Lin Yuan once shared his bull run strategy: "In the fourth quarter, our theoretical guidance is to buy on big dumps."

He explained that in the early stages of a bull run, some stocks or sectors are actually already in a bull run. For example, individual stocks that have doubled or even tripled in the past few years will experience a pullback after a significant rise at a certain stage, which is also very normal.

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Look at the remarks from crypto big shot CZ, he retweeted the opinion of weRate co-founder Quinten: "During the pandemic, $1.2 billion was liquidated, during the FTX collapse, $1.6 billion was liquidated, today $19.31 billion is being liquidated, and people hope to buy in like they did during the pandemic collapse, and this time it is the current pandemic collapse."

The market always swings between extreme fear and extreme greed, rarely staying in the middle ground.

A bull run is not a straight line upward, but a process of advancing two steps and retreating one. Only those who can withstand the fluctuations can laugh until the end.