By Francisco Rodrigues (All times ET unless otherwise noted)
A rapid and violent sell-off wiped out more than $500 billion from crypto markets on Friday, triggering forced liquidations, collapsing wrapped tokens, leading to nearly $20 billion in liquidations and straining exchange infrastructure.
The flash crash, described by Bitwise portfolio manager Jonathan Man as perhaps the worst liquidation event in crypto history, wiped out $65 billion in open interest and reset positioning to levels last seen in July.
The violent crash saw Bitcoin fell 13% in a single hour before rebounding, while some tokens saw flash crashes of over 40%. Since then, the market has recovered, with the CoinDesk 20 Index (CD20) now up 7.7% in the past 24 hours, while still down around 7.4% since the crash.
On Binance, infrastructure outages caused wrapped assets like wBETH and BNSOL to massively gap away from their underlying prices. wBETH, which is intended to track ether, fell as low as $430 while ETH traded above $3,800. Binance has committed to compensating affected users and moved to a more stable conversion-based pricing model for wrapped assets.
“Market structure issues, including large derivatives exchanges liquidating users (regardless of their margin), availability issues, and some stablecoin and liquid staking assets experiencing significant price disruptions relative to their underlying collateral assets, have all contributed to the current situation,” said Stuart Connolly, CIO at Deus X Capital, in a mailed statement electronic.
“The ‘Perp Dex’ narrative, which has been so popular, has taken some significant steps backwards,” he added. “The market needed a reset, and if President Trump’s stance softens, as seems likely, we will see crypto assets rise during the fourth quarter as a result.”
The current US government shutdown means markets are still operating in a data vacuum. Amid the risk-off sentiment, gold continued to rally, helping tokens backed by the precious metal like PAXG and XAUT to near $4,090.
Today, US markets will remain closed and there are few macroeconomic benchmarks to rely on. Instead, traders will be watching the market reaction as liquidity increases after the weekend.
So far, none of the commonly used major crypto market cycle indicators have been triggered. Stay vigilant!
What to watch
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Cryptocurrency
- October 13: CME Group aims to launch options on SOL and XRP, subject to regulatory approval.
- Macro
- Earnings (Estimates based on FactSet data)
Token Events
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
- Votes and calls on governance
- 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 yield income for its treasury. Voting closes on October 13.
- ENS DAO is voting on a proposal to establish reverse records for its main contracts to improve identification, usability and demonstrate best practices in fully utilizing the ENS protocol. Voting closes on October 13.
- Unlocks
- Token Launches
- October 14: Launch of SANDchain, an Ethereum layer 2 powered by zk.
Conferences
For a more comprehensive list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
Symbolic discussion
By Olivier Knight
- The crypto market kicked off Monday with a rebound following a sharp weekend leverage surge. According to data from CoinMarketCap, the total crypto market cap climbed about 5.7% over the past 24 hours, with volume jumping about 26.8%, suggesting that those liquidated over the weekend are buying back their positions.
- A total of $19 billion in derivatives positions were wiped out over the weekend, with the vast majority going to those who held long positions. Over the past 24 hours, however, $626 billion was liquidated, including $420 billion in the short term, demonstrating a reversal in sentiment, according to CoinGlass.
- The recovery has been timid so far; Bitcoin’s dominance remains high at around 58.45%, down slightly from recent highs, implying that altcoins may still lag behind as capital accumulates towards safer large-cap names.
- The big winner of Monday’s recovery was which increased by more than 12
Positioning of derivative products
- 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. Likewise, the 3-month annualized basis has rebounded to the 6-7% range, after dropping to 4-5% over the weekend, indicating that bullish sentiment has largely returned. However, financing rates remain a major point of divergence; while Bybit and Hyperliquid have stabilized around 10%, Binance’s rate is negative.
- The BTC options market is showing a new bullish trend. The 24-hour Put/Call volume has shifted to be more in favor of calls, now at over 56%. Additionally, the 1-week Delta Skew increased to 2.5% after a period of stagnation.
- These metrics indicate a market with increasing demand for upside exposure and upside protection, reflecting a move away from recent “prudent neutrality.”
- Data from Coinglass shows $620 million in liquidations over 24 hours, with a 34-66 split between long and short positions. ETH ($218 million), BTC ($124 million), and SOL ($43 million) were the leaders in terms of notional liquidations. Binance’s liquidation heatmap shows $116,620 as the base liquidation level to watch, in case of a price rally.
Market movements
- BTC is up 0.48% from 4 p.m. ET Wednesday at $115,132.15 (24 hours: 3.05%)
- ETH is up 0.97% at $4,166.14 (24 hours: 8.96%)
- CoinDesk 20 is up 0.42% at 3,852.77 (24 hours: +6.92%)
- Ether CESR composite staking rate is down 98 basis points to 2.92%
- BTC funding rate is -0.0012% (-1.367% annualized) on Binance
- The 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
- The Nikkei 225 closed down 1.01% at 48,088.80
- Hang Seng closed 1.52% lower at 25,889.48
- FTSE is unchanged at 9,428.00
- The Euro Stoxx 50 is up 0.68% at 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
- The Nasdaq Composite closed down 3.56% at 22,204.43
- The S&P/TSX Composite Index closed down 1.38% at 29,850.89
- The S&P 40 Latin America closed down 2.54% at 2,785.96
- The 10-year U.S. Treasury yield is down 8.9 basis points at 4.059%.
- E-mini S&P 500 futures are up 1.35% at 6,684.00
- E-mini Nasdaq-100 futures are up 1.88% at 24,856.25
- The E-mini Dow Jones Industrial Average is up 0.97% at 46,150.00
Bitcoin Statistics
- BTC dominance: 59.22% (-0.44%)
- Ether/bitcoin ratio: 0.03617 (0.11%)
- Hashrate (seven-day moving average): 1,021 EH/s
- Hash price (spot): $48.33
- Total fees: 2.43 BTC / $274,808
- Open Interest on CME Futures: 145,105 BTC
- BTC valued in gold: 28.6 ounces
- Market capitalization BTC vs gold: 8.06%
Technical analysis
- Following the largest liquidation event in industry history, prices of major cryptocurrencies began to stabilize, gradually returning to levels seen the previous week. ETH briefly fell to $3,400 before rebounding to regain weekly lows around $4,070.
- Notably, the $3,400 area aligns with the EMA200 on the daily timeframe, 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, thereby establishing a low and signaling further trend strength.
Crypto Stocks
- Coinbase Global (COIN): closed 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 Cash 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 Feed
Spot BTC ETF
- Daily net flow: -$4.5 million
- Cumulative net flows: $62.73 billion
- Total BTC holdings ~1.36 million
ETH Spot ETF
- Daily net flow: -$174.9 million
- Cumulative net flows: $14.92 billion
- Total ETH holdings ~6.87 million
Source: Farside Investors
While you were sleeping
