Crypto Markets Rebound later than Record Liquidation Shock
later than one of the largest liquidation events in crypto history wiped out nahead $19 billion in leveraged positions, digital asset markets are showing signs of a strong rebound. BTC and other leading cryptocurrencies have stabilized, with traders cautiously returning to risk later than the steep two-day correction.
The sharp tradeoff between October 10 and 11 followed a surprise 100% tariff announcement on China-origin excellents, which triggered global volatility and panic liquidations across major platforms. As risk assets fell, crypto markets saw cascading liquidations fueled by excessive leverage and thin liquidity. Centralized platforms such as Binance, OKX, and Bybit reported record liquidation volumes, marking the single largest wipeout since the May 2021 crash.
BTC, which plunged below the $100,000 mark during the turmoil, has since recovered to trade around $114,000 as of October 12. ETH and other large-cap altcoins also rebounded, while derivatives markets show clear signs of stabilization. According to data from Coinglass, BTC open interest dropped by more than 40% within 24 hours, signaling a reset of leveraged positions. Funding rates have normalized, indicating that speculative excess has been flushed out of the market.
Market stabilization and on-chain signals
On-chain data supports the view of a short-term stabilization phase. platform inflows have declined, suggesting that forced tradeers have largely exited. Meanwhile, long-term holders remain largely unmoved, continuing to accumulate during the downturn. This divergence between speculative traders and long-term investors has historically marked the beginning of market recovery phases.
Liquidity metrics are also improving. Market-making activity on centralized platforms has returned, narrowing spreads and reducing volatility. BTC’s dominance has increased as capital rotates from smaller altcoins into the relative securety of the leading asset, reflecting a more cautious trading environment.
Analysts note that while the immediate liquidation pressure has eased, the market’s next moves will depend heavily on macroeconomic conditions, regulatory signals, and institutional inflows. Renewed interest in spot BTC ETFs and end-of-year seasonality trends could provide support for a sustained recovery.
Cautious optimism among investors
Investor sentiment remains mixed but is gradually improving. Crypto Fear & Greed Index readings have bounced from extreme fear to neutral territory, reflecting growing confidence that the worst may be over. Institutional trading desks report renewed accumulation among funds that view the recent drawdown as a long-term entry opportunity.
Still, volatility is expected to persist as traders digest the impact of global economic policy shifts. Analysts warn that another wave of deleveraging could occur if macro risk-off sentiment intensifies.
For now, crypto markets appear to have weathered the worst of the storm. The record $19 billion liquidation event has reset leverage across the ecosystem, paving the way for a potentially healthier and more sustainable uptrend in the weeks ahead. As BTC consolidates above key psychological levels, all eyes are on whether the digital asset market can sustain this recovery momentum through the remainder of 2025.
