Crypto Rebounds After the $20 Billion “Massacre”
The Global Crypto Market Shaken by a Historic Crash
The global cryptocurrency market has just experienced a major shock as Bitcoin and Ethereum plunged sharply over the weekend. Within just seven hours, Bitcoin dropped from $121,000 to a low of $109,000, wiping out all gains accumulated since early October—often referred to by investors as “Uptober.” Ethereum also fell to $3,686, while Solana managed to stay slightly above $173, according to data from CoinGecko.
Data from CoinGlass shows that the total value of liquidated positions reached nearly $20 billion in a single day, with long positions accounting for $16.7 billion. In just one hour, over $7 billion was wiped out from the derivatives market, triggering a massive domino effect across exchanges. Sean Dawson, Head of Research at the on-chain options platform Dervie, described it as “the largest single-day liquidation in crypto history.”
The Cause Behind the Sell-Off: U.S.–China Trade Tensions
The turmoil wasn’t limited to the crypto market. U.S. equities also tumbled after President Donald Trump announced the cancellation of a meeting with Chinese President Xi Jinping and ordered a significant increase in tariffs on Chinese imports. The decision followed Beijing’s move to restrict exports of rare earths and critical minerals, sparking fears of an escalating trade war between the world’s two largest economies.
As a result, major Wall Street indices turned sharply lower: the Nasdaq fell 3.6%, the S&P 500 dropped 2.7%, and the Dow Jones slipped 1.9%. By the weekend, however, China appeared to soften its stance, with many analysts suggesting that the sell-off was an overreaction to sudden political developments rather than a reflection of fundamental weakness.
Impressive Recovery After the Liquidation Storm
Following this turbulent period, the crypto market began showing clear signs of recovery. By Monday morning, Bitcoin had risen 5% to $115,100, while Ethereum surged over 10% to $4,138. Major altcoins followed suit, with Solana up 12%, BNB jumping 16.5%, and Dogecoin gaining 11.4%.
Dean Serroni, CEO of Merkle Tree Capital, described the move as a classic technical rebound after an excessive correction. He noted that the market is currently in a “mean reversion” phase—returning to its natural balance—as selling pressure subsides and overleveraged positions are flushed out. “Ethereum’s strong rebound isn’t driven by fresh buying, but by short covering and capital reallocation,” Serroni added.
Expert Insights: A Temporary Reaction, Not a Structural Crisis
Seasoned investors view this sharp decline as a necessary “shakeout” to restore market health. The massive liquidations have not only reduced leverage but also set the stage for a more sustainable accumulation phase. Analysts emphasize that this event represents a short-term geopolitical reaction rather than a systemic breakdown.
“This was a temporary shock, not a structural market failure,” Serroni stated. He added that if tensions between the U.S. and China continue to ease, the crypto market could soon stabilize and enter a new phase of growth in the coming weeks.
Disclaimer: The content above reflects the author’s personal views and does not represent any official position of Cobic News. The information provided is for informational purposes only and should not be considered as investment advice from Cobic News.