After the October 11 Crypto Crash: Three Key Factors Shaping the Crypto Market’s Next Move

Crypto in Recovery after October 11th Bloodbath

Key Highlights

• After the October 11 flash crash, the crypto market saw its largest liquidation, losing over $20 billion.

• The crypto market has stabilized and is on the road to recovery, with BTC already rising to $114k.

The crypto market is entering a delicate recovery phase after the brutal “October 11 flash crash,” which triggered the largest liquidation event in recent history. While prices have started to bounce back, analysts caution that the full repercussions could take days or even weeks to surface fully.

The October 11 Crypto Crash

During the market crash, Bitcoin, which was trading above $126,000, suddenly plunged to a multi-month low of $102,000 before recovering above $110,000. As of this writing, Bitcoin was trading at $114,052, after rising by 1.7% in 24 hours.

Ethereum followed a similar trajectory, collapsing from near $4,700 to below $3,500. The altcoin market, however, faced an unprecedented wipeout. Coins such as ATOM, SUI, APT, SEI, LINK, and ADA saw their prices fall by over 80–99% within hours.

According to data from CoinGlass, nearly $20 billion worth of crypto positions were liquidated in just 24 hours, affecting over 1.6 million traders, mostly longs. The $19.37 billion figure dwarfed liquidation totals from both the COVID-19 crash and the FTX collapse, and some analysts believe the real number could be even higher. CoinGlass noted that Binance only reports one liquidation order per second, suggesting a lag in real-time data.

The epicenter of the storm was Hyperliquid, a rapidly growing perpetuals exchange that unexpectedly recorded the highest liquidation volume $10.31 billion. This was more than double Bybit’s $4.65 billion and over four times Binance’s $2.41 billion. Analysts like Zaheer Ebtikar pointed out that Hyperliquid had the “largest amount of long liquidations with the least matching liquidity,” creating a feedback loop that intensified the crash.

A major point of contention was Hyperliquid’s Auto-Deleveraging (ADL) mechanism, designed to protect the exchange by force-closing leveraged positions when the insurance fund is insufficient. Spencer Hallarn of GSR explained that this mechanism “creates complex problems for market makers and sophisticated participants,” as it can unwind hedged portfolios prematurely, worsening volatility.

While many traders were wiped out, not everyone lost. Data showed that the top 100 Hyperliquid traders collectively made $1.69 billion, with one trader pocketing over $700 million through short positions. Meanwhile, over 1,000 wallets were completely liquidated, and more than 6,300 were left in loss, amounting to $1.23 billion in wiped-out capital.

As the dust settles, analysts are focusing on three key factors that will determine the market’s trajectory in the future.

Contagion Risks and Institutional Losses

Edward Chin, CEO of Parataxis, warned that in the coming days or weeks, news may emerge of funds being liquidated or market makers suffering heavy losses. Counterparty risk is now front and center, as the industry watches for potential knock-on effects similar to those seen after major past crises.

Critical Bitcoin Support at $100K

Caroline Mauron, co-founder of Orbit Markets, pointed out that Bitcoin’s next major support level sits at $100,000. A break below this threshold, she argued, would signal the end of the three-year bull cycle. If the market dips below this, we could see a significant drop. However, the market seems well poised to rally and completely recover from the crash.

Macro Shocks and Excessive Leverage

Vincent Liu, CIO at Kronos Research, attributed the plunge to tariff fears stemming from recent U.S.–China tensions but emphasized that excessive institutional leverage amplified the move. His comments highlight how macroeconomic developments continue to drive crypto price action, especially when leverage builds up in the system.

Although the market is showing early signs of stabilization, the road ahead remains uncertain. With massive liquidations, shaken confidence, and critical support levels being tested, traders and investors are bracing for potential aftershocks. A sustained recovery will likely depend on whether profit-taking slows, leverage resets, and no major contagion emerges in the coming weeks.

Previously on EMCryptohub: Bitcoin under pressure as profit-taking soars