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Bitcoin News Today: Bitcoin's 13% Crash Unveils Crypto's Fragile Yet Resilient Underpinnings
Generated by AI AgentCoin World
Saturday, Oct 11, 2025 6:58 pm ET2min read
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Aime SummaryBitcoin experienced a significant 13% drop within 8 hours, falling from a record high above $126,000 to $112,013, amid geopolitical tensions triggered by U.S. President Donald Trump's 100% tariff announcement on Chinese goods. The total crypto market capitalization plummeted by 9% to $3.8 trillion, erasing $200 billion in value within hours [1]. According to Coinglass, this marked the largest liquidation event in crypto history, with over $19 billion in leveraged positions wiped out, affecting 1.6 million traders [2]. The sell-off cascaded across exchanges, with Bitcoin's price breach of $115,000 triggering margin calls and automated liquidations [1].
Despite the sharp decline, data suggests the market is stabilizing.
rebounded to $111,600, with on-chain metrics indicating that long-term holders remained inactive while short-term traders dominated the selling. Blockchain analytics revealed a net inflow of buyers, increasing Bitcoin holders from 56.92 million to 56.98 million [3]. Whale activity further signaled confidence, with large wallets accumulating over 7,800 BTC in cold storage [3]. Technical indicators also pointed to potential recovery, with the Relative Strength Index (RSI) showing bullish divergence and Bitcoin hovering above the 0.5 Fibonacci level at $111,400 [3].
The crash highlighted structural vulnerabilities in the crypto ecosystem.
Labs' synthetic stablecoin de-pegged by 38%, exposing flaws in DeFi protocols reliant on complex collateral systems [2]. The liquidation wave disproportionately affected leveraged long positions, with and suffering 12.5% and 16.5% declines, respectively [1]. Analysts attributed the volatility to a combination of geopolitical risk, excessive leverage, and fragile liquidity, noting parallels to past crashes such as the 2020 "Black Thursday" event [2].However, historical patterns suggest Bitcoin's resilience. The 13% drop in October 2025 aligned with previous corrections, including the 16.1% intraday plunge in November 2022 during the FTX collapse [5]. Despite the severity, Friday's liquidations were less impactful in percentage terms due to the market's growth since 2022 . Institutional investors and market makers have begun adjusting strategies, with derivatives open interest declining 18% and liquidity stabilizing on major exchanges [3].
Key technical and behavioral signals indicate a potential bottoming process. The Spent Coins Age Bands (SCAB) metric showed older wallets remained dormant, a sign of conviction among long-term holders [3]. Additionally, the Fear and Greed Index dropped to "Fear," historically preceding rebounds in risk assets [3]. Analysts project Bitcoin could test $120,000–$122,000 in the coming weeks, with a 50% probability of reaching $140,000 by month-end [3].
While the immediate future remains volatile, the data underscores Bitcoin's fundamental strength. Exchange reserves hit a 12-month low, signaling investors are moving coins off exchanges rather than panic-selling [3]. Regional activity in Switzerland and Asia remained robust, with Swiss institutional funds capitalizing on the dip [3]. Analysts caution that regulatory scrutiny of stablecoin mechanisms will likely intensify, but the broader market's ability to absorb shocks without systemic collapse suggests the worst of the selloff may be over [2].
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