By Francisco Rodrigues (All times ET unless indicated otherwise)
A swift and intense sell-off erased over $500 billion from crypto markets on Friday, resulting in forced liquidations and collapsing wrapped tokens, which led to nearly $20 billion in liquidations and put pressure on exchange infrastructure.
The rapid crash, characterized by Bitwise portfolio manager Jonathan Man as potentially the most severe liquidation event in crypto history, wiped out $65 billion in open interest and reset market positioning to levels reminiscent of July.
The drastic crash caused Bitcoin drop 13% within just one hour before recovering, while some tokens experienced flash crashes exceeding 40%. Since then, the market has begun to bounce back, with the CoinDesk 20 (CD20) index now up 7.7% over the past 24 hours, although it remains down about 7.4% from the crash.
On Binance, technical issues led to wrapped assets like wBETH and BNSOL significantly straying from their actual prices. wBETH, designed to track ether, plummeted to $430, while ETH was above $3,800. Binance has committed to compensating affected users and moved to a more stable conversion-based pricing model for wrapped assets.
“Issues with market structure, including large derivatives exchanges liquidating users regardless of their margin, uptime difficulties, and significant price dislocations of stablecoin and liquid staking assets from their underlying collateral backing, have all contributed to the current situation,” stated Stuart Connolly, CIO at Deus X Capital, in an email.
“The ‘Perp Dex’ narrative that has gained traction has seen a notable setback,” he continued. “The market required a reset, and if President Trump’s stance softens, as it appears it may, we could see crypto assets climbing in Q4.”
The ongoing U.S. government shutdown means markets are functioning amidst a lack of data. During this risk-off sentiment, gold has continued to rise, supporting tokens backed by the precious metal, such as PAXG and XAUT, which approach $4,090.
Today, U.S. markets will remain closed, with few macro indicators to guide traders. Instead, they will observe how the market responds as liquidity increases post-weekend.
None of the commonly utilized crypto market cycle top indicators have yet been triggered. Stay vigilant!
What to Watch
For a detailed list of events this week, see CoinDesk’s “Crypto Week Ahead”.
- Crypto
- Oct. 13: CME Group planning to launch options on SOL and XRP, subject to regulatory approval.
- Macro
- Earnings (Estimates based on FactSet data)
Token Events
For a comprehensive list of this week’s events, refer to CoinDesk’s “Crypto Week Ahead”.
- Governance votes & calls
- Superfluid DAO is voting on a proposal to upgrade contracts for wrapper superTokens like ETHx and USDCx to allow the DAO to invest their underlying assets and yield income for its treasury. Voting ends Oct. 13.
- ENS DAO is voting on a proposal to establish reverse records for its core contracts to enhance identification, usability, and showcase best practices by fully utilizing the ENS protocol. Voting ends Oct. 13.
- Unlocks
- Token Launches
- Oct. 14: SANDchain, a zk-powered Ethereum layer-2, launches.
Conferences
For a detailed list of events this week, see CoinDesk’s “Crypto Week Ahead”.
Token Talk
By Oliver Knight
- The crypto market began Monday with a rebound following a sharp weekend leverage flush. According to data from CoinMarketCap, the total crypto market cap rose approximately 5.7% in the past 24 hours, with volume surging around 26.8%, indicating that those liquidated over the weekend are buying back their positions.
- A total of $19 billion in derivatives positions vanished over the weekend, primarily from long positions; in the last 24 hours, however, $626 billion was liquidated, with $420 billion of that being shorts, reflecting a sentiment reversal, according to CoinGlass.
- The recovery has been cautious so far; Bitcoin’s dominance remains high at about 58.45%, slightly down from recent peaks, indicating that altcoins might continue to lag as capital flows back into more stable large-cap assets.
- The standout performer during Monday’s rebound was , which climbed over 12%.
Derivatives Positioning
- The BTC futures market has stabilized after a turbulent period. Open interest, which fell from $33 billion to $23 billion over the weekend, has now adjusted to approximately $26 billion. Additionally, the 3-month annualized basis has bounced back to the 6-7% range after dropping to 4-5% over the weekend, indicating a strong return of bullish sentiment. Nonetheless, funding rates remain a critical area of divergence; while Bybit and Hyperliquid have settled around 10%, Binance’s rate is negative.
- The BTC options market is exhibiting a renewed bullish inclination. The 24-hour Put/Call Volume has tilted towards calls, now over 56%. Furthermore, the 1-week 25 Delta Skew has risen to 2.5% after previously being flat.
- These indicators suggest a market increasingly demanding bullish exposure and upside protection, reflecting a departure from the earlier “cautious neutrality.”
- Coinglass data indicates $620 million in liquidations over the last 24 hours, with a 34-66 split between longs and shorts. ETH ($218 million), BTC ($124 million), and SOL ($43 million) led the way in terms of notional liquidations. The Binance liquidation heatmap shows $116,620 as a key liquidation level to watch, should prices rise.
Market Movements
- BTC is up 0.48% from 4 p.m. ET Wednesday at $115,132.15 (24hrs: 3.05%)
- ETH is up 0.97% at $4,166.14 (24hrs: 8.96%)
- CoinDesk 20 is up 0.42% at 3,852.77 (24hrs: +6.92%)
- Ether CESR Composite Staking Rate down 98 bps at 2.92%
- BTC funding rate is at -0.0012% (-1.367% annualized) on Binance
- DXY is up 0.13% at 99.11
- Gold futures are up 2.37% at $4,095.10
- Silver futures are up 5.08% at $49.65
- Nikkei 225 closed down 1.01% at 48,088.80
- Hang Seng closed down 1.52% at 25,889.48
- FTSE remains unchanged at 9,428.00
- Euro Stoxx 50 is up 0.68% at 5,568.86
- DJIA closed down 1.90% at 45,479.60 on Friday
- S&P 500 closed down 2.71% at 6,552.51
- Nasdaq Composite closed down 3.56% at 22,204.43
- S&P/TSX Composite closed down 1.38% at 29,850.89
- S&P 40 Latin America closed down 2.54% at 2,785.96
- U.S. 10-Year Treasury rate down 8.9 bps at 4.059%
- E-mini S&P 500 futures up 1.35% at 6,684.00
- E-mini Nasdaq-100 futures are up 1.88% at 24,856.25
- E-mini Dow Jones Industrial Average Index up 0.97% at 46,150.00
Bitcoin Stats
- BTC Dominance: 59.22% (-0.44%)
- Ether to bitcoin ratio: 0.03617 (0.11%)
- Hashrate (seven-day moving average): 1,021 EH/s
- Hashprice (spot): $48.33
- Total Fees: 2.43 BTC / $274,808
- CME Futures Open Interest: 145,105 BTC
- BTC priced in gold: 28.6 oz
- BTC vs gold market cap: 8.06%
Technical Analysis
- In the aftermath of the largest liquidation event in the industry’s history, major cryptocurrency prices are beginning to stabilize, slowly returning to levels observed the week prior. ETH temporarily fell to $3,400 before bouncing back to reclaim the weekly range lows around $4,070.
- Importantly, the $3,400 level coincides with the daily EMA200, providing reliable technical support. ETH is currently trading near $4,150, just below the daily EMA50.
- Traders would like to see a weekly close above $4,070, effectively confirming a swing low and signaling a resurgence of strength in the trend.
Crypto Equities
- Coinbase Global (COIN): closed on Friday at $357.01 (-7.75%)
- Circle Internet (CRCL): closed at $132.94 (-11.66%)
- Galaxy Digital (GLXY): closed at $39.38 (-6.73%)
- Bullish (BLSH): closed at $60.41 (-9.44%)
- MARA Holdings (MARA): closed at $18.65 (-7.67%)
- Riot Platforms (RIOT): closed at $21.01 (-5.7%)
- Core Scientific (CORZ): closed at $18.52 (+2.66%)
- CleanSpark (CLSK): closed at $19.28 (-4.03%)
- CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $55.34 (-3.87%)
- Exodus Movement (EXOD): closed at $28.5 (-3.94%)
Crypto Treasury Companies
- Strategy (MSTR): closed at $304.79 (-4.84%)
- Semler Scientific (SMLR): closed at $26.8 (-5.37%)
- SharpLink Gaming (SBET): closed at $15.31 (-9.65%)
- Upexi (UPXI): closed at $6.35 (-7.3%)
- Lite Strategy (LITS): closed at $2.47 (-2.76%)
ETF Flows
Spot BTC ETFs
- Daily net flow: -$4.5 million
- Cumulative net flows: $62.73 billion
- Total BTC holdings ~ 1.36 million
Spot ETH ETFs
- Daily net flow: -$174.9 million
- Cumulative net flows: $14.92 billion
- Total ETH holdings ~ 6.87 million
Source: Farside Investors
