New coin LIGHT plummets 58%, triggering liquidation of 18.22 million, market risks behind extreme volatility

LIGHT experienced a 58.38% price plunge in the past 1 hour, currently trading at 1 USDT, triggering a large number of liquidations in a short period. This extreme volatility not only shook the market but also exposed the high-risk nature of new tokens. Let’s take a look at what happened behind this fluctuation.

Overview of Extreme Volatility Data

According to the latest news, LIGHT’s volatility varies greatly across different timeframes:

This data reflects two key points: first, the sharp short-term fluctuations contrast with the long-term upward trend; second, the significant decrease in open interest indicates market participants are rapidly withdrawing.

Liquidation Crisis and Market Risks

The most noteworthy aspect is the chain reaction caused by this fluctuation. Data shows that the total liquidation amount in the past 24 hours reached 18.2216 million, which is quite substantial. Considering the 24-hour trading volume of this token is 3.876 billion, the proportion of liquidated funds is not high, but the concentration within a short period indicates the presence of substantial leveraged positions in the market.

Why are new tokens prone to extreme volatility?

LIGHT was only listed for trading on September 25, 2025, just over three months ago. As a new token, it has the following characteristics:

• Relatively few market participants, with relatively fragile liquidity
• Speculative funds tend to concentrate, and a change in direction can easily trigger a stampede
• Imperfect price discovery mechanism, with volatility often exceeding that of mature tokens
• Possibly high participation in leveraged trading, amplifying risks

What does the decline in open interest imply?

A 38.28% decrease in open interest within 1 hour suggests two possible market behaviors: one, a large number of stop-loss orders are being triggered as investors exit before losses widen; two, forced liquidations are occurring as leveraged positions are automatically closed when the price falls below stop-loss levels. In any case, it indicates that market confidence is rapidly eroding.

Market Characteristics and Investor Warnings

The uniqueness of this fluctuation

Although LIGHT increased by 168.01% over the past 7 days, this sharp drop can be seen as profit-taking and risk release. However, it is noteworthy that at the current price of 1 USDT, the token has returned to a relatively low level, which may attract new bottom-fishing capital, further increasing market uncertainty.

Key issues to monitor

• Is market liquidity sufficient? The contradiction between high trading volume (3.876 billion) and rapid decline in open interest may indicate liquidity gaps at certain price levels
• Leverage risk exposure: The 18.2216 million liquidation amount suggests the presence of sizable leveraged positions
• Possibility of a rebound: After extreme declines, technical rebounds often occur, but the height and sustainability of such rebounds need to be observed

Summary

This sudden plunge of LIGHT exemplifies the high-risk nature of new tokens. While extreme volatility can present trading opportunities, it is more important to recognize the embedded risks. High trading volume, large-scale liquidations, and rapid open interest decline all indicate the market is experiencing intense emotional swings. For investors, understanding the liquidity characteristics and participant structure of new tokens before trading is crucial. Such tokens tend to be more volatile than expected, and risk management should be prioritized.