The greater the wind and waves, the more expensive the fish.

Last week, Bitcoin broke through $100,000 with great momentum.

At the same time, it also drove the overall rise of the entire cryptocurrency market. As a result, some altcoins also saw significant increases.

As of Sunday (December 8), 82% of the top 50 altcoins outperformed Bitcoin in the past 90 days. When this figure exceeds 75%, it indicates the arrival of the "altcoin season."

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 1](https://static.aicoinstorge.com/article/20241210/173381209389191.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 1")

However, in the early hours of December 10, Bitcoin sharply dropped to around $94,000, causing severe fluctuations in the altcoin market. Just last week, there were calls for the arrival of the "altcoin season," but this morning, the market collectively plunged.

AICoin data shows that, apart from coins like SOS, ENA, and the newly listed MOVE, which performed relatively well, most other coins experienced significant declines, with losses generally exceeding 10%.

Here are the downward trends of several mainstream altcoins.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 2](https://static.aicoinstorge.com/article/20241210/173381574790087.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 2")

Here are several coins that are leading the decline.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 3](https://static.aicoinstorge.com/article/20241210/173381430286119.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 3")

Due to this decline, the total liquidation amount across the network reached $1.694 billion in the past 24 hours, with 560,000 people liquidated; among them, the liquidation amount for altcoins was $1.296 billion.

Among these, long positions were particularly severely liquidated, with losses from long positions accounting for over 90% during this liquidation wave, especially in the altcoin market, where the liquidation amount reached $564 million, primarily from long positions.

The high amount of liquidation has set a new record since the "519 incident" in 2021 and is expected to become a new high in this bull market, far exceeding the levels seen during the "312 incident" in 2020.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 4](https://static.aicoinstorge.com/article/20241210/173381609247500.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 4")​​​​​​​

The recent significant decline in the altcoin market and the large-scale liquidation events can be attributed to several core reasons:

1. The Chain Reaction of High-Leverage Trading

• The prevalence of leveraged trading: Driven by the pursuit of high returns, many investors use leverage for trading. This strategy can amplify profits when the market is stable or rising, but it can quickly magnify the risk of losses during significant price fluctuations.
• Liquidation of leveraged positions triggers a chain reaction: When market prices drop rapidly, leveraged positions hit the liquidation line, and the system forcibly sells assets (liquidation). This selling behavior further lowers prices, triggering more liquidations of leveraged positions, creating a negative feedback loop, and resulting in a "stampede" style decline in the market.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 5](https://static.aicoinstorge.com/article/20241210/173381791181855.jpg "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 5")

2. Amplification of Market Sentiment Panic

• Shift to pessimism: The price declines of mainstream coins like Bitcoin and Ethereum triggered panic among investors. Many chose to sell assets to reduce potential losses, and this behavior quickly spread to the altcoin market.
• The snowball effect of panic selling: As prices fall, panic intensifies, leading more investors to join the selling ranks, resulting in reduced market liquidity and increased selling pressure, further driving down prices.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 6](https://static.aicoinstorge.com/article/20241210/173381808756935.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 6")

3. The Impact of External Factors

• External news triggering panic: News such as Google launching quantum chips raised concerns about the security of cryptocurrencies, increasing investors' risk-averse sentiment and leading to intensified selling.
• Macroeconomic environment: Global market fluctuations or changes in interest rate policies may indirectly affect the cryptocurrency market, prompting investors to withdraw from high-risk assets.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 7](https://static.aicoinstorge.com/article/20241210/173381831868710.jpg "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 7")

4. Concentration Risk of Long Positions

• Dominance of long positions: Data shows that in this decline, long positions accounted for over 90% of the liquidated positions. Under the inertia of bull market thinking, the accumulation of long positions has put greater liquidation pressure on the market.
• Imbalanced leverage configuration: Investors generally favor long leverage, and when the market reverses, investors without hedging mechanisms are forced to liquidate, further amplifying the decline.

![Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 8](https://static.aicoinstorge.com/article/20241210/173381837717759.png "Hotspot Focus—The "Black Dawn" of AltcoinsaicoinImage 8")

5. The High Volatility Characteristics of the Altcoin Market

• Insufficient liquidity: Altcoins typically have lower liquidity, leading to more severe price fluctuations during large-scale sell-offs.
• Lack of fundamental support: Many altcoins have limited technical or application support, making them easy to abandon during periods of low market sentiment.

The decline in the altcoin market is the result of a combination of various factors, including high leverage behavior within the market, amplification of panic sentiment, the spillover effect from Bitcoin, and disturbances from external news.

This "domino effect" reminds investors to remain rational, reduce reliance on leverage, and strengthen risk management to avoid falling into a passive situation in a highly volatile market.

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