According to blockchain analyst Joshua Duckett, last week’s dramatic crypto crash, which saw Bitcoin plunge below $105,000 and Ethereum tumble more than 20%, was fueled by one critical factor: extreme leverage.
“When traders borrow a hundred times more than they hold, even a small move turns catastrophic,” he explained. The wave of margin calls, panic selling, and automated liquidations quickly cascaded across exchanges, amplifying losses throughout the system.
Duckett noted that the speed of the collapse underscored crypto’s unique volatility.
“This market never sleeps. There are no circuit breakers, no pauses, just a chain reaction when fear spreads,” he said. The result was one of the sharpest intraday declines since 2022, wiping billions from market capitalization within hours.
A Market Searching for Equilibrium
Despite the carnage, Duckett pointed to early signs of stabilization. With forced liquidations tapering off and trading volumes normalizing, volatility could ease in the near term. “We’re seeing early indicators that selling pressure has plateaued. The system is trying to find a new balance,” he observed. Still, he cautioned that renewed policy shocks or liquidity squeezes could easily reignite turbulence.
Lessons From the Collapse
The crash served as a stark reminder of the dangers of over-leverage and herd-driven behavior in crypto markets. Duckett warned retail investors to reassess their strategies, emphasizing discipline over emotion. “In this market, risk moves faster than reason,” he said. “Never gamble with what you can’t afford to lose.”
As Bitcoin slowly rebounds, the episode leaves behind a familiar lesson, in crypto, fear and greed move in seconds, and stability remains a fleeting illusion.
