Friday’s cryptocurrency selloff was a rapid, leverage-driven cascade that crushed altcoins while bitcoin held up relatively better — and the next phase depends on a handful of signals, according to Wiston Capital founder Charlie Erith.
In a Sunday article 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%. He added that about $560 billion, or 13.1%, has been wiped from the total crypto market value since October 6 and cited $18.7 billion in liquidations during the episode.
He linked the immediate trigger to President Donald Trump’s Truth Social threat of an additional 100% tariff on Chinese imports, but argued that the fall was already in motion: Stocks continued to climb while crypto “felt distinctly fragile,” a divergence he took as an advance warning.
Bitcoin, he said, “behaved largely as expected.” It fell, but less than the long tail, leaving Bitcoin close to a long-term uptrend from late 2022 and increasing its market share as non-Bitcoin tokens absorbed “immense technical damage.” Erith said his fund had emerged “largely unscathed” because its positioning had already been defensive.
What Erith Watches Next
Erith said he tracks Bitcoin’s 365-day exponential moving average as a line that separates bullish from corrective regimes. He added that a pullback towards the $100,000 zone and a slight touch of that average would not, in itself, upset his long-term view provided the level holds – but that a prolonged breakout would increase the risk of a deeper reset.
He also highlighted the breadth of the market via bitcoin’s share of the total crypto value. According to Erith, the sell-off accelerated the rotation towards more liquid assets, further strengthening Bitcoin’s dominance. He said a continued increase in this share alongside low magnitude would argue for caution on high-beta tokens until non-Bitcoin charts are rebuilt.
Beyond Bitcoin’s own levels, Erith highlighted that Strategy’s equity is 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 significant decline in Bitcoin. According to him, staying above this trend line would support the discourse on resilience; a break below could foreshadow further selling pressure.
Volatility is the other indicator. Erith said the VIX – the “fear index” of stocks – has started to rise and that, historically, better entries come when volatility rises rather than during the initial rise. This framework involves being patient in adding risk as the stresses of stock volatility play out.
Regarding positioning, Erith said he remains invested but avoids leverage and has liquidity “while we wait for the dust to settle.” He said moves like this have, in his experience, sometimes preceded broader downturns, which is why he prefers to see the above signals stabilize before increasing exposure.
Erith said the selloff caused heavy damage to altcoins, while bitcoin’s monthly decline was modest and comparable to large-cap tech, which he sees as evidence of growing resilience.
