Crypto Weekly Roundup – Navigating Tariffs, Liquidations, and Rebound Signals

The cryptocurrency market entered a brutal reset this week, capping a volatile October with a flash crash that exposed deep leverage vulnerabilities while underscoring resilient institutional demand. Bitcoin’s plunge from a record $126,223 on Oct 6 to below $110,000 by Oct 12 marked the sector’s sharpest correction since early 2024, driven by macroeconomic tremors rather than internal crypto catalysts. Yet, as prices clawed back toward $115,000 by Oct 13, the episode highlighted a maturing market: one where overextended longs were purged, paving the way for potential fresh highs if global tensions ease. Total market cap swung from $4.36 trillion to $3.87 trillion before rebounding to $4 trillion, with trading volumes spiking to $270 billion on recovery days. This volatility, while painful, aligns with October’s historical patterns—often the month’s most turbulent for risk assets—fueled by the “debasement trade” where investors flock to BTC and gold amid $3.7 trillion US debt fears and a weakening dollar. Sentiment shifted from “greed” to “fear” mid-week before stabilizing near neutral, per the Crypto Fear & Greed Index, as on-chain data showed strengthened fundamentals like rising network activity and profitability metrics.

Trump’s Tariff Bombshell Ignites Historic Liquidation Cascade

President Donald Trump’s Oct 10 announcement of a 100% additional tariff on Chinese goods—layered atop existing levies—served as the spark for crypto’s most devastating single-day event, liquidating $19.1 billion in positions and eclipsing even the 2022 FTX collapse in scale. This “black swan” for the sector, as dubbed by traders, amplified a broader Wall Street selloff where the S&P 500 dropped 2.7% and Nasdaq fell 3.5%, but crypto’s leverage magnified the pain: longs accounted for $16.7 billion of the wipeout, per CoinGlass data. Bitcoin tumbled 11% intraday, Ethereum cratered 15%, and altcoins like Solana and XRP shed 20-30%, briefly pushing stablecoin Ethena’s USDe below $1 peg amid derivative chaos. The timing—low Friday liquidity—exacerbated the cascade, with insiders reportedly shorting minutes prior, fueling conspiracy whispers of a rigged purge.

Yet, this wasn’t mere panic; it exposed structural risks in a market bloated by post-ATH euphoria. Pre-crash, BTC had surged 95% YTD on ETF hype, but metrics like overheated open interest ($187 billion) and speculative excess signaled a cooldown was inevitable. Analysts at Glassnode noted the drop “cleaned out excessive leverage,” resetting risk and boosting on-chain health—network activity and capital inflows sharpened post-crash. For Trump, whose ~$870M Bitcoin holdings via Trump Media make him a top whale, the irony stings: his policy directly hammered an asset he’s deeply vested in, raising ethics flags about potential self-serving pivots. Longer-term, tariffs could fragment global trade, pressuring mining costs (China still dominates hardware) and altcoin ecosystems tied to cross-border flows. But if de-escalation follows—as hinted by Trump’s weekend comments—the purge could catalyze a healthier bull phase, with VanEck eyeing $644K BTC amid gold’s parallel rally. The Fed’s late-October meeting now looms large: looser policy could extend the rally, but persistent trade wars risk deeper sub-$100K probes.

Other News

Other news:

Positive 📈

• Global crypto ETFs drew record $5.95B inflows, with US leading at $5B, propelling BTC to ATH before crash.
• Ethereum spot ETFs added $420M on Oct 7, pushing cumulative inflows past $15B amid institutional surge.
• Morgan Stanley lifted crypto fund restrictions for wealth clients, signaling Wall Street’s deepening embrace.
• MARA Holdings scooped 400 Bitcoin on Oct 13 rebound, underscoring miner accumulation.
• Dutch firm Amdax raised €30M to launch Bitcoin treasury ops, boosting European adoption.

Neutral ⚖️

• MicroStrategy paused BTC buys after Q3’s $3.9B unrealized gains, citing valuation caution.
• UK’s Nigel Farage called for urgent crypto regulations to maintain London’s financial edge.
• Crypto market entered consolidation phase, with Fed’s Oct FOMC eyed as key volatility trigger.
• S&P Global launched crypto index for tokenized securities, advancing TradFi-blockchain bridge.

Negative 📉

• Ukrainian trader Konstantin Galich found dead in Lamborghini amid crash turmoil, spotlighting stress.
• US BTC/ETH ETFs saw $4.5M/$175M outflows on Oct 10, reflecting short-term flight to safety.
• Altcoins like Solana, XRP, and ADA dropped 15-30% in tariff rout, lagging BTC recovery.
• Gold’s $4K/oz surge siphoned flows from risk assets, capping crypto’s post-crash momentum.

3. Market Movers and Opportunities

Lately, the crypto market’s biggest movers reflect the week’s whiplash: gainers like Ethereum (+11.6% on Oct 13) and Binance Coin (+14.9%) led the rebound, while Layer-2 tokens like Mantle surged 38% on DeFi optimism. Losers included overleveraged alts like Aster (-14%) and Provenance (-20% intraday), but the crash’s purge created tentative buying dips. With sentiment resetting and tariffs de-escalating, Ethereum stands out as a buy opportunity—trading at $4,152 after a 15% haircut, its ETF inflows and network upgrades (e.g., Dencun) position it for 20-30% upside to $5,200 if BTC holds $115K. Solana offers high-beta entry below $200, but avoid if trade wars persist. No clear BTC dip buy yet; wait for $110K stabilization.