On Wednesday evening, a leading exchange's BTC/USD1 trading pair experienced a dramatic fluctuation — Bitcoin plummeted from $87,600 to $24,100 within seconds, a drop of over 70%. But at nearly the same speed, the price rebounded back to around $87,000.

This "flash crash" was limited to the USD1 trading pair; other major BTC trading pairs remained unaffected, and subsequent trading quickly returned to normal.

What happened? Industry analysts believe that such sudden volatility typically stems from two factors: liquidity exhaustion or system display errors. Especially for some emerging or low-volume stablecoin trading pairs, there is often a lack of sufficient market makers to support the order book, resulting in shallow depth. A large market sell order, a forced liquidation, or certain automated trading instructions can easily break through buy orders, causing the price to momentarily detach from the true market level — until new buy orders flood in.

Interestingly, many spot holders found that their positions were hardly affected before and after this volatility. This also reflects the limitations of flash crashes — they may be issues specific to certain trading pairs' liquidity rather than systemic risk.

Given the current geopolitical uncertainties and fluctuating market liquidity, this event serves as a wake-up call for traders engaging in excessive leverage.

At the time of writing, BTC is quoted at $87,516.76. Over the past 24 hours, a total of 73,643 traders have been liquidated, with total liquidation amount reaching $104 million.