Friday\'s severe cryptocurrency collapse, which was one

📌 Friday’s severe cryptocurrency collapse, which was one of the sharpest one-day drops in market history, may look like a disaster, but leading experts believe it’s more of a reset than a crash.

According to a new report from The Kobeissi Letter, the massive sell-off, which saw individual cryptocurrencies lose up to 95% of their value in less than a day, was not caused by weakening fundamentals, but by extreme leverage and unexpected macroeconomic shocks. . Bitcoin

– According to a new report from The Kobeissi Letter, the massive sell-off, which saw individual cryptocurrencies lose up to 95% of their value in less than a day, was not caused by weakening fundamentals, but by extreme leverage and unexpected macroeconomic shocks.

Analysts characterized the event as a “perfect storm” that hit a market already heavily focused on long positions. More than $16.7 billion in longs were liquidated, compared to $2.5 billion in shorts – an impressive 7-to-1 ratio that amplified the speed and severity of the decline. The collapse coincided with U.S. President Donald Trump’s announcement of 100 percent tariffs on Chinese imports late Friday, a period known for low liquidity and sharp price reactions.

We believe this drop was the result of the simultaneous interaction of multiple technical factors, the Kobeissi team wrote. “This move is not indicative of a deterioration in fundamentals. A correction was inevitable, and we remain optimistic about the long-term trajectory of cryptocurrencies.

Within hours, the market saw a $20 billion wave of liquidations, ruining 1.6 million leveraged traders and sending small altcoins spiraling toward near-zero valuations. The total market capitalization of all cryptoassets except bitcoin and Ethereum (the so-called Total3 index) fell from $1.15 trillion to roughly $766 billion before stabilizing – a drop unparalleled since the FTX and Terra/LUNA collapses.

Despite the bloodbath, some industry spokespeople see it as a healthy purge. Corey Klippsten, CEO of Swan Bitcoin, told Cointelegraph that the sell-off is likely to flush out “weak hands” and over-leveraged traders, laying the groundwork for more sustainable growth going forward. “Such corrections often become the fuel for the next rally, he added.

Others believe the real losses may be deeper than the liquidation figures indicate. Some traders point out that forced sales and cascading liquidations are putting pressure on credit platforms and derivatives markets, which have so far remained in the shadows.