To put this into perspective: The liquidation event we saw over the last 24 hours was ~$17 BILLION larger than the February 2025 crash. It was more than 19 TIMES larger than the March 2020 crash and collapse of FTX. Never in history have we seen anything even close to this.

Amid the liquidation, Bitcoin recorded a $20,000 DAILY candlestick. This marks a $380 BILLION swing in Bitcoin's market cap alone, in a single-day. That's more than the market cap of all but 25 public companies in the world. Once again, this has never happened in history.

But, why did this happen? To better understand, take a look at the timeline below: At 9:50 AM ET, crypto began selling off before the 10:57 AM ET Trump tariff post. At 4:30 PM ET, a large "whale" took shorts in crypto. At 4:50 PM ET, Trump announced a 100% tariff on China.

The first question becomes, how did this large "whale" time the drop so perfectly? By 5:20 PM ET, 30 minutes after Trump's tariff announcement, liquidations hit -$19.5 billion. The shorts were closed promptly after the drop for +$192M in profit. But, there's more.

The main culprit of this appears to be a combination of excessive leverage and risk. If you take a look at the breakdown of liquidations it was heavily skewed towards longs. $16.7 billion in longs were liquidated compared to ~$2.5 billion in shorts. That's a 6.7:1 ratio.

Even more evidence of the excessive long leverage in the market: ALL major exchanges except for Bitfinex saw an overwhelming percentage of long liquidations. Most were 90%+ long including a massive $10.3 BILLION on Hyperliquid alone. The same exchange the "whale" used.

The next component was the "shock effect." Markets became excessively crowded to the long direction after a historic run from the April 2025 low. Greed exceeded 60, as shown below, days before the crash. The sudden shock of the tariff post led to a MASSIVE shift in sentiment.

Liquidity was the next issue: Trump's announcement came 50 minutes after US markets closed Friday. As seen many times, Friday night and Sunday night often come with LARGE crypto moves. Why? Liquidity is thin. The sudden rush of volume after the post led to a domino effect.

So, what's next? We believe this crash was due to the combination of multiple sudden technical factors. It does NOT have long-term fundamental implications. A technical correction was overdue, we think a trade deal will be reached, and crypto remains strong. We are bullish.

This week's rebound in volatility means opportunity for investors. The macroeconomy is shifting and stocks, commodities, bonds, and crypto are investable. Want to receive our premium analysis? Subscribe to access our premium analysis below: http://thekobeissiletter.com/s...

Yesterday's drop was a reminder of how fragile yet profitable markets have become. Between 9:30 AM ET and 5:20 PM ET, crypto erased -$800 BILLION of market cap. Remain objective and capitalize on volatility. Follow us @KobeissiLetter for real time analysis as this develops.

@KobeissiLetter Biggest liquidation ever… and someone out there still just opened 50x long 😭

@gainzalgo Leverage + Greed are a dangerous combination.

@KobeissiLetter Nine times the record. Somewhere, Satoshi just facepalmed in binary.

@SurfinSatoshis Crypto is the most exciting industry in history.

@KobeissiLetter no need to read all that. just stay calm and forget about the short term noise.

@dimitriospaolo You should use short-term noise to your advantage.

@KobeissiLetter So Tuesday we're gonna see a huge inflow?

@Jay_Biedebach Next week will be interesting to say the least.

@KobeissiLetter I lost everything over this. There are some airdrops that might save me but I’m just completely sick of Trump at this point. Never voting republican again.

@KobeissiLetter Leveraged people are so exposed, they know where a youre at and then they came and hunted you down. Im thankful for the dip.

@KobeissiLetter @Threadreaderapp unroll

@KobeissiLetter One comment could have summed this up. It’s simply rigged. That was the cause.

@KobeissiLetter The crypto bros deserved to get liquidated. If you are 10 X leveraged in fartcoin with your entire retirement account then what do you think is gonna happen?

@KobeissiLetter Massive wake-up call for Crypto traders- enormous leverage combined with extremely illiquid market conditions after close for the week a recipe for trading disasters. Stay away from leveraged products and DAT entities- buy your fav flavor directly & treat as long run spec asset.

@KobeissiLetter It's easy, people leveraged their positions on shit meme alt coins, instead of storing dollars in bitcoin they actually bought. 🔥💯🔥 Anyone in bitcoin can handle a 10% loss in a day as a usual course of business.

@KobeissiLetter take away. more peeps than ever using leverage.

@KobeissiLetter This SnapBack rally is going to be glorious Smart money just capitalized on the liquidation event You now have retail traders selling after a drop in price due to fear In exchange to smart money News is how smart money absorbs Fear = retail sells the lows Smart $ buys

@KobeissiLetter Trump can remain irrational longer than you can remain solvent

@KobeissiLetter Blackrock has 900,000 coins; you all don't think they could do this same thing anytime they want on a whim? Whales own 95% of the supply.

@KobeissiLetter Let’s see if this continues on Monday open

@KobeissiLetter This isn't a crypto story. It's a market structure story. The $19B cascade wiped out ~2.5% of the entire crypto market cap in a matter of hours. In traditional markets, exchange circuit breakers would have halted trading at a 7% drop to prevent exactly this. Crypto has no brakes.

@KobeissiLetter Every panic parade needs a theme. When 1.6 million hapless souls flock to rope ; step stool they unwittingly star in a grand satire of impulse culture ; and prove that sometimes the most mundane tools become overnight icons of collective absurdity.

@KobeissiLetter @threadreaderapp unroll

@KobeissiLetter All of you explanation is related to cult mentality