By Francisco Rodrigues (All times Eastern Time unless otherwise noted)
A rapid and violent sell-off wiped more than $500 billion from crypto markets on Friday, triggering forced liquidations, the collapse of wrapped tokens, leading to nearly $20 billion in liquidations and straining exchange infrastructure.
The flash crash, described by Bitwise portfolio manager Jonathan Man as possibly the worst liquidation event in cryptocurrency history, wiped out $65 billion in open interest and restored positioning to levels last seen in July.
The violent fall saw Bitcoin it fell 13% in a single hour before recovering, while some tokens saw sudden drops of over 40%. Since then, the market has been recovering, and the CoinDesk 20 Index (CD20) is up 7.7% in the last 24 hours, although it is still down 7.4% since the drop.
On Binance, infrastructure failures caused wrapped assets like wBETH and BNSOL to diverge wildly from their underlying prices. wBETH, which is meant to track ether, fell as low as $430 while ETH traded above $3,800. Binance has pledged to compensate affected users and has switched to a more stable conversion-based pricing model for packaged assets.
“Market structure issues, including large derivatives exchanges liquidating users (regardless of their margin), uptime issues, and some stablecoins and liquid assets experiencing significant price dislocations from their underlying supporting assets, have contributed to where we are today,” Stuart Connolly, CIO of Deus X Capital, said in an emailed statement.
“The ‘Perp Dex’ narrative that has been so popular has taken some significant steps back,” he added. “The market needed a reset, and if President Trump’s stance softens, as it looks like it might, we will see a surge in crypto assets during the fourth quarter as a result.”
The current US government shutdown means markets continue to operate in a data vacuum. Amid the risk-off sentiment, gold has continued to rise, helping precious metal-backed tokens like PAXG and XAUT approach $4,090.
Today, US markets will remain closed and there are few macroeconomic references to rely on. Instead, traders will watch how the market reacts as liquidity gets a boost after the weekend.
So far, none of the commonly used crypto market cycle high indicators have been triggered. Stay alert!
What to watch
For a more complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Crypto
- October 13: CME Group aims to launch options on SOL and XRP, subject to regulatory approval.
- Macro
- Earnings (Estimates based on FactSet data)
symbolic events
For a more complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Governance votes and calls
- Superfluid DAO is voting on a proposal to upgrade contracts for wrapper superTokens like ETHx and USDCx so that the DAO can invest its underlying assets and generate income for its treasury. Voting ends on October 13.
- ENS DAO is voting on a proposal to establish reverse registrations for its main contracts to improve identification, usability and demonstrate best practices by fully using the ENS protocol. Voting ends on October 13.
- Unlock
- Token releases
- October 14: SANDchain, an Ethereum layer 2 powered by zk, is launched.
Conferences
For a more complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
symbolic talk
By Oliver Knight
- The cryptocurrency market started Monday with a rally after strong leverage over the weekend. According to data from CoinMarketCap, the total crypto market capitalization increased by approximately 5.7% in the last 24 hours, and volume increased by approximately 26.8%, suggesting that those liquidated over the weekend are buying back their positions.
- A total of $19 billion in derivatives positions were eliminated over the weekend with the vast majority attributed to those holding long positions; However, in the last 24 hours, $626 billion was liquidated, of which $420 billion was shorted, demonstrating a change in sentiment, according to CoinGlass.
- The recovery has been timid so far; Bitcoin dominance remains elevated at around 58.45%, modestly below recent highs, implying that altcoins may still lag behind as capital accumulates back into safer large-cap names.
- The big winner of Monday’s recovery was which increased by more than 12
Derivatives positioning
- The BTC futures market has stabilized after a volatile period. Open interest, which had fallen from $33 billion to $23 billion over the weekend, has now stabilized at around $26 billion. Similarly, the 3-month annualized base has recovered to the 6-7% range, after falling to 4-5% over the weekend, indicating that bullish sentiment has largely returned. However, funding rates remain a key area of divergence; While Bybit and Hyperliquid have stabilized around 10%, Binance’s rate is negative.
- The BTC options market is showing a renewed bullish trend. The 24-hour buy/sell volume has changed to more favor calls, now above 56%. Additionally, the 1-week 25 Delta Skew has risen to 2.5% after a period of stagnation.
- These metrics indicate a market with increasing demand for bullish exposure and upside protection, reflecting a move away from recent “cautious neutrality.”
- Coinglass data shows $620 million in 24-hour liquidations, with a 34-66 split between longs and shorts. ETH ($218 million), BTC ($124 million), and SOL ($43 million) were the leaders in terms of notional settlements. The Binance settlement heatmap indicates $116,620 as the central settlement level to monitor, in case of a price surge.
Market movements
- BTC is up 0.48% as of 4 pm ET Wednesday to $115,132.15 (24 hours: 3.05%)
- ETH is up 0.97% to $4,166.14 (24 hours: 8.96%)
- CoinDesk 20 rose 0.42% to 3,852.77 (24 hours: +6.92%)
- Ether CESR Composite Staking Rate is down 98 bps to 2.92%
- BTC funding rate is at -0.0012% (-1.367% annualized) on Binance
- DXY rises 0.13% to 99.11
- Gold futures rise 2.37% to $4,095.10
- Silver futures rise 5.08% to $49.65
- The Nikkei 225 closed down 1.01% at 48,088.80
- Hang Seng closed down 1.52% at 25,889.48
- FTSE unchanged at 9,428.00
- The Euro Stoxx 50 rises 0.68% to 5,568.86
- DJIA closed Friday down 1.90% at 45,479.60
- The 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
- The S&P 40 Latin America closed with a fall of 2.54% to 2,785.96
- The 10-year US Treasury rate fell 8.9 basis points to 4.059%
- E-mini S&P 500 futures up 1.35% to 6,684.00
- E-mini Nasdaq-100 futures rise 1.88% to 24,856.25
- The E-mini Dow Jones Industrial Average index rises 0.97% to 46,150.00
Bitcoin Statistics
- 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 market capitalization against gold: 8.06%
Technical analysis
- Following the largest liquidation event in the history of the industry, prices of major cryptocurrencies have begun to stabilize, gradually returning to the levels seen the previous week. ETH briefly fell to $3,400 before recovering to reclaim the weekly lows of the range around $4,070.
- Notably, the $3,400 zone lines up with the EMA200 on the daily chart, providing strong technical support. ETH is currently trading near $4,150, just below the daily EMA50.
- Bulls will want to see a weekly close above $4,070, effectively setting a bottom and signaling renewed strength in the trend.
Crypto Stocks
- 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
BTC Spot ETF
- Daily net flow: -4.5 million dollars
- Accumulated net flows: $62.73 billion
- Total BTC holdings ~1.36 million
ETH Spot ETF
- Daily net flow: -$174.9 million
- Accumulated net flows: $14.92 billion
- Total ETH holdings ~6.87 million
Source: Farside Investors
while you were sleeping
