The Real Story Behind Market Volatility
In the wake of recent market turbulence, veteran analyst Raoul Pal has put forward a compelling theory: the sharp drop on October 10 wasn't just a mechanical cascade of liquidations, but likely involved active participation from major trading platforms.
Exchanges Are No Longer Passive Players
Pal argues that leading exchanges may have actively absorbed large volumes of forced liquidations during the sell-off. This goes beyond simple order matching—it resembles a coordinated capital absorption strategy.
Gradual Unwinding Signals Strategic Planning
Instead of dumping positions immediately, the absorbed assets are being offloaded slowly, with minimal market impact. The pattern mirrors institutional block-trading algorithms designed to exit massive positions without disrupting price.
- Unusual trade distribution during peak stress periods
- Platform-imposed trading restrictions despite no technical outages
- Post-crash recovery that defies historical volatility models
These dynamics suggest exchanges are evolving into de facto stability operators during crises. Such a shift could redefine market microstructure and challenge existing regulatory frameworks in the long term.