[Analysis] "This plunge is a technical correction… Not a long-term shift to bearishness Not"

Analysts say that this week's crash in the virtual asset (cryptocurrency) market will not lead to a long-term bearish shift or a deterioration of fundamentals.

On the 12th (local time), Kobeisi Letter said on X, "This plunge was the result of excessive leverage and risk exposure combined with President Donald Trump's announcement of a 100% tariff on imports from China," adding, "It is only a short-term adjustment caused by technical factors acting in combination, and the market's structural fundamentals remain unchanged."

Kobeisi Letter pointed out, "The market was heavily skewed toward long positions. Looking at liquidation volumes alone, long positions amounted to about $16.7 billion, seven times the short positions ($2.5 billion)."

It also said, "Trump's tariff announcement occurred around 5 p.m. local time on Friday, when market liquidity was at its thinnest, which led to extreme increases in volatility," adding, "This plunge is a short-term relief of overheating, and the market is highly likely to recover quickly if US-China trade negotiations resume."

Earlier, about $20 billion (about 27 trillion won) worth of positions were liquidated in this plunge, and about 1.6 million traders were liquidated over 24 hours, according to tallies. This is the largest liquidation size, surpassing the collapse of FTX and the Terra-Luna incident.