Author: Stacy Muur Source: X, @stacy_muur Translation: Shan Ouba, Golden Finance
Catalyst: After the US stock market closed, the Trump administration announced a 100% tariff on Chinese goods and introduced software export controls (effective November 1st).
Crypto Market Losses: Liquidations reached $16-19 billion; Bitcoin (BTC) fell 12% and Ethereum (ETH) fell 16% on the day, with most altcoins falling between 20% and 53%. Traditional Market Performance: The S&P 500 fell 2.71%, the Nasdaq fell 3.56%, and the Dow Jones Industrial Average fell 1.90%. Background: Record-high market leverage, high open interest, and low weekend liquidity exacerbated the decline. Future Trends: The market is expected to enter a stabilization phase, followed by a likely gradual recovery rather than a V-shaped rebound.
October 10 (Friday) Morning: Tariff threats resurfaced, and Bitcoin fluctuated under pressure around $117,000.
After the U.S. stock market closed: The 100% tariff policy and software export control measures were officially announced, and Bitcoin plummeted by approximately $3,000 in a matter of minutes. During the Asian trading session, the wave of liquidations accelerated. By midday Hong Kong time, long position liquidations had reached $16.7 billion. In summary, the Trump administration's announcement of 100% tariffs on Chinese goods, coupled with the implementation of critical software export controls effective November 1st, triggered a safe-haven sell-off across all asset classes. The crypto market experienced its largest-ever dollar-denominated liquidation. Amidst thin weekend liquidity, the chain reaction of forced liquidations further amplified the decline.
Current price: USD 110,541; intraday low: USD 104,582; intraday high: USD 121,705; 24-hour drop: 12.4%. Volume: Approximately $153 billion, nearly double the recent average. A long lower shadow candlestick pattern suggests selling pressure is nearing exhaustion. Key Levels: Support at $104,000; Resistance at $118,000-$120,000; Next Supply Zone at $125,000-$127,000. Important Data: Exchange Fund Flows October 8: 38,020 BTC flowed into exchanges (fund distribution phase). October 9th: 7,320 BTC flowed out of exchanges (fund accumulation phase). October 10th: 6,180 BTC flowed out of exchanges (accumulation during panic). Interpretation: Before the crash, funds were distributed at market highs; after the crash, funds began to accumulate at low levels during panic. 2. Ethereum Current Price: $3,765; Intraday Low: $3,460; Intraday High: $4,755; 24-hour Drop: 16.1%. Trading volume: Approximately $97.7 billion, a new interim high. On October 7th, the price encountered resistance at $4,755 and then fell back, a pattern consistent with a "distribution at high levels." Key levels: Support at $3,460; Resistance at $4,100-4,350; Next supply zone around $4,750. Important data: Exchange fund flows. October 8th: 686,750 ETH flowed into exchanges (large-scale distribution). October 9th: 86,930 ETH flowed out of exchanges (strong accumulation). October 10th: 49,530 ETH flowed out of exchanges (continued accumulation).
General decline: Peak retracement range is between 20%-53%.
Individual Performance:
XRP: fell to a low of $1.64 before rebounding to $2.36.
DOGE and ADA: Heavy selling pressure led the decline.
SOL: Relatively resilient, with smaller declines than most altcoins.
LINK and AAVE: Showed "capitulation" selling.
Drivers of the decline: Low liquidity, high leverage concentration, capital shift to Bitcoin and stablecoins, and insufficient order book depth during forced liquidations. 4. Traditional Markets: The S&P 500 fell 2.71%, the Nasdaq fell 3.56%, and the Dow Jones Industrial Average fell 1.90%, with the technology sector leading the decline. Trend Characteristics: This decline reflects a market-wide risk-off trend and is not unique to the crypto market. III. Liquidation Mechanism: Total liquidation volume: $16-19 billion, of which approximately $16.7 billion (87%) is attributed to long positions and approximately $2.4 billion (13%) is attributed to short positions. Scale Comparison: In US dollar terms, this liquidation is an order of magnitude larger than the FTX crash or the March 2020 "black swan" event (although the overall market size is also larger). Why are liquidations so large? After Bitcoin approached its all-time high of $127,000, market leverage has accumulated excessively. Market makers' risk appetite declined over the weekend, creating a liquidity vacuum. Derivatives markets are under pressure: negative funding rates, fluctuations in stablecoin basis values, and forced deleveraging have triggered a chain reaction.
Policy impact: 100% tariffs and software export controls directly lead to a repricing of corporate earnings expectations and supply chain risks, with growth stocks and the technology sector bearing the brunt. The policy will take effect on November 1, with a clear time point, and short-term headline pressure will continue. Market Position: High leverage and high open interest (OI) make the market extremely sensitive to negative news and weak in risk tolerance. Regulatory Background: Uncertainty regarding US crypto policy remains, limiting the willingness of some institutions to buy on dips. V. Future Trend Outlook Please note: The following does not constitute financial advice and is for reference only. 1. Typical Post-Plummet Trend Sequence Phase I: Continued Decline and De-Risking (Completed). Phase II: Stabilization Driven by Data and Market Maker Behavior (Ongoing).
Phase 3: Basis correction and cross-platform arbitrage return to normal (ongoing, this process may limit the initial rebound).
Phase 4: Liquidity restoration drives a gradual recovery (most likely within the next 1-2 weeks).
Optimistic Scenario (40% probability): Bitcoin's "investment low" of $104,000 and Ethereum's $3,460 hold, with prices moving toward the maximum pain point range for options ($118,000-120,000 for Bitcoin and $4,100-4,350 for Ethereum). Pessimistic Scenario (35% probability): If trade frictions escalate or liquidity remains tight, prices could retest or even slightly break below previous lows, targeting $95,000-100,000 for Bitcoin and $3,000-3,200 for Ethereum. Baseline Scenario (25% probability): Range-bound trading is expected, targeting $105,000-120,000 for Bitcoin and $3,500-4,200 for Ethereum. 3. Key Price Levels to Watch: Bitcoin: $104,582 (key support); $110,000 (bull-bear watershed); $115,000 (first resistance); $118,000-120,000 (major resistance); $125,000-127,000 (supply zone). Ethereum: $3,460 (key support); $3,750 (bull-bear watershed); $4,000 (psychological barrier); $4,100-4,350 (major resistance); $4,750 (supply zone).
Bitcoin ETF: Strong inflows (approximately $3.5 billion) were recorded from October 6th to 9th, with a small outflow on October 10th. Interpretation: Buyers are temporarily on the sidelines, not a large-scale withdrawal.
Ethereum ETF: Significant outflows (approximately $175 million) were seen on October 10th. Interpretation: While this sends a negative signal, the outflows are still relatively small relative to the total market capitalization.
Wait for clear signs of stabilization and adopt a "fixed investment" approach to invest in Bitcoin and Ethereum.
Use no or minimal leverage, with stop-loss orders set below $104,000 for Bitcoin and $3,400 for Ethereum.
Avoid niche altcoins with thin liquidity. 2. Aggressive Strategy: Try a tactical long position around $110,000 for Bitcoin and $3,750 for Ethereum, with leverage of 2-3x. Targets: $118,000 for Bitcoin and $4,100 for Ethereum; set strict stop-loss orders (below $103,000 for Bitcoin and below $3,400 for Ethereum). Gradually reduce positions as resistance levels are approached. 3. Long-Term Strategy: Maintain core exposure and increase holdings on dips during market corrections. Focus on Bitcoin, Ethereum, and a few high-quality projects with ample liquidity. VII. Structural Conclusions: Cryptocurrencies remain highly volatile and risky assets, and macroeconomic shocks can be quickly transmitted to the market. Leverage remains the core driver of amplified declines, and overleverage has always been a key driver of market crashes. A "capitulation-style long lower shadow" candlestick pattern under extreme trading volume often signals a mid-term investment opportunity. Trade policy uncertainty will keep market volatility elevated. This recent plunge is essentially a "high-leverage sell-off amidst negative macroeconomic conditions," rather than a breakdown in the core logic of the crypto industry. Fund flow data shows that the market was distributing at high levels before the crash, and panic accumulation began during the plunge. If there is no further policy deterioration, the market is expected to enter a stabilization window. After profit-taking is complete, it will gradually recover towards the $118,000-$120,000 range for Bitcoin and $4,100-$4,350 for Ethereum.
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