The week from Oct 7 to 13 despite a Friday flash crash, crypto markets staged an impressive rebound by the weekend. A sudden trade-war escalation sent Bitcoin (BTC) and Ethereum (ETH) tumbling mid-week, only for both to find their footing and close the week above critical support levels. BTC ended the week down –6.1% and ETH –7.8%, recovering much of their losses after heavy liquidations rocked the market. Among major altcoins, Binance Coin (BNB)stood out with a +12.9% weekly gain, defying the sea of red. In contrast, XRP(–15.0%), Solana (–14.1%), Cardano (–16.8%), Dogecoin (–17.5%), and TRON(–5.2%) all suffered double-digit percentage drops as volatility spiked across the board. Overall sentiment has flipped cautious but optimistic, as traders assess whether the worst is over and if Bitcoin can reclaim its 55-day EMA on the daily chart to confirm a true rebound.
Flash Crash Fueled by Tariff Shocker and Leverage Wipeout
Late Friday, October 10, U.S. President Donald Trump unleashed a market bombshell by announcing a new 100% tariff on Chinese imports a surprise escalation of the trade war . Crypto prices, already softening on earlier tariff threats, plunged within minutes of the announcement. Bitcoin, which had been hovering around $117K, nosedived roughly 10% and briefly traded in the low $100Ks, dipping under $110,000 for the first time in months . Some exchanges recorded BTC wicks as low as ~$102,000 during the pandemonium . Ether (ETH) was hit even harder, tanking over 15% to break below $3,700 at the depths of the crash . Major altcoins were eviscerated: Solana, XRP, and Dogecoin collapsed 20–30%, and certain mid-caps saw 50%+ intraday losses as a wave of forced selling cascaded through the market . In one stunning example, Sui (SUI) a newer layer-1 coin plunged over 70% at one point during the liquidation cascade .
This violent shakeout was one for the history books. Seasoned traders likened it to the March 2020 COVID crash in its speed and severity . Within about half an hour of Trump’s posts, billions in long positions were wiped out as margin calls and stop-losses turned into market sell orders. Estimates vary, but around $7–$19 billion worth of leveraged crypto positions were liquidated in 24 hours — the largest liquidation event in crypto history . One analysis pegged the tally at roughly $19.2B (with ~$16.7B of longs and $2.5B of shorts closed out), 12× larger than the previous record from the FTX collapse . As one pseudonymous influencer noted, “the inevitability of this sort of wipe had been building for months” amid rampant leverage, yet “it was still shocking to see the severity and speed of it” . Indeed, the crypto Fear & Greed Index flipped from exuberant “Greed” to deep “Fear”practically overnight plunging from a reading of 64 to 27 within 24 hours of Trump’s tariff news .
Market Manipulation Concerns and Exchange Fallout
The abrupt crash and its bizarre side effects have left the crypto community debating: how much was pure macro panic versus market manipulation?On crypto Twitter, many pointed out that the magnitude of the drop far exceeded what the tariff headline alone might justify. Industry experts noted that a domino effect of liquidation cascades on highly leveraged futures was the primary culprit, exacerbated by poor exchange liquidity . On some platforms, stop-loss triggers failed to fire properly, and auto-deleveragingkicked in as exchanges tried to contain the damage . In other words, the market’s plumbing broke under stress creating what one trader called the “mother of all shakeouts” .
Leading exchange Binance drew particular ire after several altcoins momentarily showed prices of $0 on its order books during the frenzy . Tokens like IoTeX, Cosmos (ATOM), and Enjin literally flatlined to zero on Binance, even though they still had value on other exchanges at the same time. Binance later blamed a UI “display issue” for the errant zero prices, explaining that certain trading pairs had recently reduced their decimal precision which caused the interface to round down to $0 . However, that explanation did little to silence criticism. The incident coincided with widespread de-pegging of synthetic assets on Binance for example, Ethena’s USDe “stablecoin” plunged to ~$0.65 amid the chaos and Binance’s own risk engine automatically sold off users’ collateral altcoins to cover losses, creating a feedback loop that further hammered prices down . Binance claims this extreme sell-off occurred due to “one-sided liquidity” (i.e. no buyers) during the crash, and says it has since paid out $283 millionto compensate users affected by the USDe and wrapped token depegging .
The turmoil has raised allegations of manipulation and calls for accountability. Crypto.com’s CEO, Kris Marszalek, openly urged regulators to investigate exchanges that suffered such dislocations (a thinly veiled swipe at Binance) . And skeptics noted that on-chain data showed suspiciously correlated sell-offs in multiple tokens just before the crash suggesting coordinated activity by a large player or bot network . While no “smoking gun” has emerged, the episode has underscored the fragility of crypto markets when both macro shocks and structural weaknesses collide. It’s a stark reminder that even as the crypto industry matures, transparency and robust risk controls on major trading venues remain a work in progress.
For more details: OneBullEx Crypto Weekly Recap: Tariff Shock Sparks Flash Crash, But Markets Fight Back – OneBullEx Blog
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