Garrett Jin explains the bearish reasons before the crypto market flash crash: Market decline caused by both macro factors and internal structural instability.

Techub News, Garrett Jin, who was previously suspected of "shorting for profit before the October 11 flash crash," tweeted to explain his bearish reasons.

He stated that from a technical analysis perspective, U.S. tech stocks, A-share tech stocks, and major cryptocurrencies all show overbought signals, such as MACD divergence; historically, cryptocurrencies and U.S. tech stocks have shown a high positive correlation, and risks may transfer between the two. Over the past week, the structure of U.S. stocks has shifted from risk-on to risk-off, and the crypto market has shown a similar pattern; since September 26, trade tensions between the U.S. and China have intensified, but due to market bullish sentiment, investors have reacted less to this. Additionally, the market decline is not only caused by macro factors but also by internal structural instability. Both the U.S. stock market and the cryptocurrency market have recently been driven by high-leverage long positions, creating fertile ground for a deleveraging crisis similar to the 2015 A-share crash and the March 2020 U.S. stock market crash. Unlike stocks, most cryptocurrencies lack an intrinsic value anchor, and their driving force comes more from investor sentiment—greed and fear. Therefore, exchanges offering aggressive leverage of 5x to 100x to retail investors for such volatile assets, whether prices rise or fall, could trigger a liquidity crisis.