The biggest black swan in today’s financial market is undoubtedly the collapse of the cryptocurrency market. On February 6, Bitcoin, the world’s largest cryptocurrency, plummeted 12% in a single day, breaking below the $63,000 mark, hitting a 16-month low. It has nearly halved from its peak in October last year and recorded the largest single-day drop since the FTX collapse. Following closely, Ethereum fell 11% to below $1,900, and the entire cryptocurrency market fell into panic selling.

According to Coinglass data, in the past 24 hours, the liquidation scale of long positions in various tokens reached as high as $1.703 billion, with 400,000 traders around the world being liquidated, and countless investors facing huge losses overnight. Market analysts pointed out that this cryptocurrency plunge coincided with the global sell-off of risky assets, coupled with market expectations of tighter cryptocurrency regulation, which further exacerbated investors’ panic.

It is worth noting that this plunge is not an isolated case. The cryptocurrency market has been weakening recently, mainly affected by the global macroeconomic environment. With the sluggish U.S. employment data and increased market risk aversion triggered by fluctuations in the AI industry, investors have withdrawn from high-risk assets and turned to safe-haven varieties such as U.S. Treasury bonds, indirectly dragging down the trend of cryptocurrencies. Some analysts warned that if the $60,000 mark is broken, Bitcoin may trigger a larger-scale sell-off and fall back to the low point after the initial rebound in early 2024.

For ordinary investors, the current cryptocurrency market is highly volatile with extremely high risk. Do not blindly bottom-hunt. In the follow-up, we need to focus on global macroeconomic data, changes in regulatory policies and the recovery of market sentiment, and arrange related investments cautiously.