Alameda sees 9/7 crash as a buying opportunity, Larry advocates for perfect, healthy deleveraging

The cryptocurrency market experienced a flash crash on the night of 9/7, with the total market value collapsing by as much as 25.8%. Mainstream exchanges also experienced delays, and analysts as well as venture capital firms have commented on the situation.

SOL Overtakes XRP at One Point

Bitcoin dropped to a low of $42,830, before rebounding to $47,190 at the time of writing; Ethereum fell to a low of $3,009 last night, before rising to $3,500.

The top ten cryptocurrencies by market value all experienced at least a 10% drop, with BNB, XRP, DOGE, DOT, UNI, and LINK all falling by over 15%.

Meanwhile, SOL, which hit a historic high yesterday, continued to perform strongly, rising by 40% from its low point last night, even overtaking XRP at one point to become the sixth largest project by market capitalization, with just a 10.8% difference from its previous high.

Major Exchanges Experience Delays

With a surge in trading volume last night, Coinbase, Kraken, and Gemini all experienced funding delays and trading issues, with problems being resolved roughly after prices hit bottom. Coinbase stock also dropped by 4.1% in sync.

The Taiwan crypto community also reported Binance experiencing downtime, although Binance did not make any official announcement regarding this. FTX CEO SBF stated that they had imposed rate limits on a large number of users, but their matching engine, risk engine, GUI, and app were all functioning normally.

According to data from Bybt and The Block, Bybit was the exchange with the highest liquidation amount during last night's crash.

Larry Cermak: A Perfect, Healthy Deleveraging

Larry Cermak, Director of Research at a foreign media outlet, believes that the previous crashes in the past few months were "unhealthy" deleveraging activities, while last night's event was a perfect, healthy deleveraging effect, especially considering the excessively high funding rates of altcoins before the crash.

Some have suggested adding the average leverage rates of each platform to The Block's chart. Larry responded that obtaining such data is difficult, as exchanges may never disclose them, but adding the ratio of "liquidation amount / total open interest" might be a good indicator for detecting over-leveraging.

Alameda: Buy the Dip

Sam Trabucco, CEO of Alameda, also shared his insights, differing from Larry's views. He believes that last night's situation was similar to Bitcoin's crash from $60,000, with observations over the past week including:

• Comprehensive significant premiums
• Rapid growth in a large number of open interest perpetual contracts
• All of the above occurred during a market uptrend

Sam Trabucco acknowledged that the retracement this time was faster than expected and that the previous uptrend should have lasted longer. The initial drop in this wave should not have led to such a large amount of liquidation, but he sees the sharp decline as a buying opportunity:

Buying in during such a sharp decline is as good as it gets. The reason is the same as before, longs are just being liquidated, and no one wants to sell at $42,000, although it is slightly different from the past, this is indeed a replay of the history of crashes, and I have a feeling this will not be the last time.