Key Takeaways
- Crypto markets suffered a record $25 billion liquidation on October 10
- Bitcoin and Ether saw significant declines, with altcoins hit even harder
- Investors are aggressively hedging against further downside risks
- Analysts see capital rotating from altcoins into Bitcoin
The cryptocurrency market experienced its largest-ever liquidation event, with over $25 billion wiped out in a single day, triggering massive investor moves to hedge against further declines.
Record-Breaking Market Meltdown
On October 10, cryptocurrency markets witnessed unprecedented liquidations totaling $19 billion (S$25 billion) as panic selling and low liquidity created extreme volatility. This marked the largest 24-hour wipeout in crypto history, dwarfing previous crashes including the February 2025 downturn, March 2020 meltdown, and the FTX collapse.
The sell-off was triggered by US President Donald Trump’s announcement of 100% tariffs on Chinese imports and threats of export controls on critical software.
Major Cryptocurrencies Hit Hard
Bitcoin plunged to $104,782.88 during October 10-11, representing a 14% drop from its $122,574.46 high on October 10. Despite a slight recovery to $115,718.13, the world’s largest cryptocurrency remains well below its October 6 record high above $126,000.
Ether, the second-largest digital currency, dropped 12.2% to $3,436.29 before recovering to $4,254. Altcoins suffered even steeper declines, with Hybe (-54%), Doge (-62%), and Avax (-70%) experiencing dramatic drawdowns.
Market Sentiment Shifts to Protection
“Last Friday, you saw volatility just jump across the board, not only for short-dated, but also for long-dated maturities. The sentiment around short-dated volatility is that more people are worried about downward turns,” said Sean Dawson, head of research at Derive.xyz in Canberra.
Data shows heavy “put” buying in Bitcoin and Ether options, indicating strong hedging activity against potential further declines. Traders purchased puts at strike prices of $115,000 and $95,000 for October 31 expiry, while call selling at $125,000 for October 17 expiry suggests bearish short-term sentiment.
Bitcoin Shows Relative Resilience
Despite the market turmoil, onchain analyst Willy Woo noted that Bitcoin investor flows remained relatively stable, possibly explaining why it outperformed expectations compared to sharp stock market declines.
“The good news is that this (crash) has cleaned out the excessive leverage and reset the risk in the market, for now,” said Nic Puckrin, crypto analyst and co-founder of The Coin Bureau. “However, Bitcoin now faces another uphill battle to break past key resistance levels that will allow it to reach a meaningful new all-time high this year.”
Woo observed capital rotating from altcoins into Bitcoin rather than exiting the crypto system entirely, reinforcing Bitcoin’s status as the “blue-chip” crypto asset preferred by institutions.
