Market data shows volatility has surged across all maturities, from short-term to long-dated contracts, as investors brace for more turbulence.
According to analysts, Friday’s crash followed U.S. President Donald Trump’s announcement of a 100% tariff on Chinese imports and possible export controls on critical software.
The move triggered a wave of panic selling, compounded by thin liquidity.
Crypto intelligence firm estimates put the $19 billion liquidation at nearly nine times larger than the February 2025 crash and 19 times bigger than the March 2020 pandemic selloff and the FTX collapse in 2022.
Bitcoin (BTC) plunged to $104,782.88, down more than 14% from its previous high of $122,574.46, before rebounding to $115,718.13. It had touched a record high above $126,000 earlier that week. Ethereum (ETH) also dropped sharply — down 12.2% to $3,436.29, before recovering to $4,254, up 2.4% on the day.
Altcoins saw even steeper losses: HYPE (-54%), DOGE (-62%), and AVAX (-70%), though most have since stabilized.
Over the weekend, President Trump attempted to calm markets, saying the U.S. “did not want to hurt China” and that “it will all be fine.”
China blamed Washington for the escalation but did not retaliate with fresh countermeasures — a move that helped steady crypto sentiment.
Still, traders remain wary. “Volatility jumped across the board on Friday,” said Sean Dawson, Head of Research at Derive.xyz in Canberra.
“Short-dated options show that more investors are bracing for downside risk.”
Options traders load up on bearish bets
Data from Derive.xyz showed a surge in put option buying on Bitcoin and Ether — contracts that allow holders to sell assets at a predetermined price.
For Bitcoin, traders piled into $115,000 and $95,000 strike puts expiring October 31.
At the same time, many shifted from call buying to call selling at the $125,000 strike for the October 17 expiry — a clear sign of bearish sentiment.
For Ethereum, traders were active at the $4,000 (Oct 31) and $3,600 (Oct 17) strikes, with some buying $2,600 December puts, according to Nick Forster, Derive.xyz co-founder. He noted that “the tone in Ether options now signals caution well into year-end.”
Bitcoin flows remain resilient amid chaos
Despite the meltdown, on-chain data suggests Bitcoin investor flows are holding up strongly.
Crypto analyst Willy Woo said Bitcoin’s relative strength likely stems from investors rotating capital out of altcoins and into BTC, rather than exiting the market entirely.
Ether and Solana, by contrast, saw significant outflows, reinforcing Bitcoin’s role as a “blue-chip” crypto asset favored by institutions.
“The good news is that this crash has flushed out excessive leverage,” said Nic Puckrin, co-founder of The Coin Bureau.
“But now, Bitcoin must overcome key resistance levels to hit a meaningful new all-time high this year.”
Whale short sparks new fears of another Bitcoin crash
Adding to jitters, a well-known trader — dubbed the “Trump Insider Whale” — has reportedly increased a massive Bitcoin short position by $392 million, raising alarms across the crypto community.
According to Arkham Intelligence, the same wallet shorted $700 million in BTC and $350 million in ETH just hours before last Friday’s crash, allegedly earning around $200 million.
The wallet has since added another $127 million in BTC shorts after depositing $40 million USDC to Hyperliquid.
The total active Bitcoin short is now estimated at nearly $300 million.
Wallet linked to billions in crypto assets
Blockchain data from StarPlatinum shows the wallet 0xb317… controls over $10 billion in assets, including 46,000 BTC and large holdings of staked ETH.
It reportedly opened a massive short just 30 minutes before Trump’s tariff announcement, then closed for a $192 million profit.
While domain records connect the address to garrettjin.eth, possibly tied to former BitForex CEO Garrett Jin, he has denied involvement.
Still, the precise timing and trade patterns have raised eyebrows among analysts and regulators.
Community calls for investigation into timing
Some traders suspect insider knowledge behind the trades.
“If this whale profits again right after Trump’s next announcement, they should be investigated,” wrote EGRAG CRYPTO on X.
Researcher Janis Kluge of SWP Berlin added, “Crypto investors are realizing what unregulated markets really mean — insider trading, corruption, and zero accountability.”
Following the crash, more than 250 wallets on Hyperliquid reportedly lost millionaire status, while another trader opened a 40x long position on Bitcoin — highlighting the extreme risk appetite still present in crypto markets.
Outlook: Fear and hedging define post-crash landscape
Analysts agree that the next few weeks are critical. With volatility at multi-month highs and traders heavily hedged, sentiment remains fragile.
If Bitcoin fails to reclaim the $120,000 zone, analysts warn another wave of liquidations could follow.
Still, some see opportunity in the reset.
“The market has cleared its leverage excess,” said Puckrin.
“Now, long-term holders have a cleaner path — but short-term volatility will stay elevated.”
Bitcoin and ether plunged hard last Friday. It triggered the largest crypto crash ever. Over $19 billion was wiped out in one day. Investors panicked and sold leveraged positions fast.
The crash followed U.S. President Donald Trump’s surprise announcement. He imposed a 100% tariff on Chinese imports. This rattled global markets and sent cryptocurrencies tumbling.
Bitcoin fell more than 14%, hitting a low near $104,783. It had topped $126,000 just days before. Ether dropped 12.2%, briefly reaching lows around $3,436. Altcoins suffered even bigger hits. DOGE plunged 62%, AVAX fell 70%, and many others crashed hard.
In the chaos, options traders rushed to hedge. Heavy buying of “put” options in bitcoin and ether signals growing fear of more declines. Puts give traders the right to sell at fixed prices. This protects them if prices fall further.
Despite big losses, bitcoin flows held up well. Analysts say capital is rotating from riskier altcoins back to bitcoin. The largest crypto whale also made massive short bets, raising concerns of insider timing.
This crash is a stark reminder of crypto’s wild swings. Volatility is sky-high. Traders are bracing for more turbulence ahead. Risk management and hedging have never been more crucial.
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