Understanding Recent Market Volatility: Key Factors 📉

High leverage in futures markets played a significant role in recent price movements. Excessive 50x-100x leverage led to rapid liquidations as prices dipped, cascading into forced selling and unwinding substantial paper gains across the market.

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Following strong rallies in various asset classes, including specific cryptocurrencies, profit-taking was a natural reaction. Investors locked in gains after parabolic movements, contributing to selling pressure across the board. 💰

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Weakness in traditional equity markets also influenced overall sentiment. Significant drops in major tech stocks impacted investor risk appetite, extending cautiousness to the crypto space. 💼

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Beyond specific news, many assets, including some cryptocurrencies, were showing signs of being overbought. The market often performs 'flushes' to rebalance and shake out weak hands, contributing to sharp corrections. 🌊

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Interestingly, this volatility wasn't necessarily triggered by a single major policy shift or geopolitical event. Instead, it appears to be a natural post-rally unwinding, driven by market structure and internal dynamics. 🔄