Friday’s cryptocurrency sell-off was a rapid, leverage-driven cascade that crushed altcoins while bitcoin held up comparatively better, and the next phase depends on a handful of signals, according to Wiston Capital founder Charlie Erith.
In a Sunday post titled “Crypto Crumble,” Erith said the market, excluding bitcoin, ether, and stablecoins, fell about 33% in about 25 minutes on Oct. 10 before rebounding to a loss of about 10.6%. It added that around $560 billion, or 13.1%, has been wiped from the total value of the crypto market since October 6 and cited $18.7 billion in liquidations during the episode.
He linked the immediate trigger to President Donald Trump’s Social Truth threat to impose an additional 100% tariff on Chinese imports, but argued that the decline was already in motion: Stocks continued to rise while cryptocurrencies “felt distinctly fragile,” a divergence he took as an early warning.
Bitcoin, he said, “largely behaved as expected.” It fell, but less than the long tail, leaving Bitcoin close to a long-lasting uptrend from late 2022 and increasing its market share as non-Bitcoin tokens absorbed “immense technical damage.” Erith said his fund emerged “largely unscathed” because positioning had already been tilted defensively.
What Erith will see next
Erith said he is following bitcoin’s 365-day exponential moving average as a line separating bullish from corrective regimes. He added that a pullback towards the $100,000 area and a touch of that average would not, on their own, negate his long-term view as long as the level holds, but a sustained breakout would increase the risk of a deeper reset.
He also noted the breadth of the market through bitcoin’s share of the total crypto value. According to Erith, the selloff accelerated a rotation toward more liquid assets, elevating bitcoin’s dominance. He said a continued rise in that share coupled with weak breadth would suggest caution in high beta tokens until non-bitcoin charts are rebuilt.
Beyond bitcoin levels themselves, Erith highlighted Strategy capital as an indicator of leverage and sentiment in the ecosystem. He noted that about four years ago a decisive move below its 365-day average preceded a major bitcoin drop. In his opinion, staying above that trend line would support the resilience narrative; a break below could herald renewed selling pressure.
Volatility is the other indicator. Erith said the VIX (the “fear index” for stocks) has started to rise and that historically the best entries come when volatility increases rather than during the initial surge. That framework involves patience to add risk as stress from stock volatility develops.
As for positioning, Erith said he remains invested but is avoiding leverage and holding cash “waiting for the dust to settle.” He said that in his experience, moves like this have sometimes preceded broader crises, so he prefers to see earlier signals stabilize before increasing exposure.
Erith said the sell-off inflicted major damage on altcoins, while bitcoin’s decline so far this month is modest and comparable to that of large-cap tech, which he sees as evidence of growing resilience.
