Opinion: This recent plunge is akin to a major market maker proactively withdrawing liquidity, and despite a profound deleveraging event, optimism for Q4 remains.

On October 11th, the crypto KOL and former FTX Community Partner, Benson Sun, posted on social media today that in the early morning, many meme coins witnessed a drop of more than 60%. In the past, extreme liquidation events usually had a scale of around 10-20 billion US dollars. However, this time, it has expanded tenfold. The sharp drop in the stock market leading to a decline in the crypto market was originally reasonable. But the massive short-term evaporation of the market capitalization of meme coins is highly unusual and not like a normal liquidation due to excessively high leverage. It is more similar to a large-scale market maker actively withdrawing liquidity, resulting in an instant deep vacuum in the market. The downturn of meme coins is even more intense than the 3/12 and 5/19 events. This round of deleveraging can be described as the most thorough one in this cycle. The market bubble has been completely squeezed, and the risk leverage has returned to zero. The outlook for the fourth quarter remains positive, and a phased dollar-cost averaging strategy will be implemented over approximately one month.