Last weekend, the cryptocurrency market faced one of the most turbulent days in its history, with Bitcoin experiencing an 18% drop that resulted in over $19 billion in liquidations—marking the largest such event ever recorded. This decline led to significant losses for various cryptocurrencies and investor portfolios, sparking a massive sell-off in the spot market.

Now that the worst seems to have passed, the market continues to deal with the ongoing effects of this incident. Despite the turmoil, analysts from Bitfinex have indicated that resilience and recovery are on the horizon. There might still be possibilities for a favorable October for investors.

What Really Occurred?

On October 10, the tensions between the U.S. and China regarding tariffs provoked a widespread market reaction that caused one of the gravest pullbacks in history. Bitcoin dropped from a peak exceeding $126,000 to $101,000, negating all gains accrued over approximately six weeks.

A prior report from Bitfinex pointed out that the $118,000 mark was vital for Bitcoin due to a significant supply cluster in that area. Analysts expressed concern that falling below this threshold would likely lead to further declines, a prediction that indeed materialized, surpassing expectations.

In just 24 hours, the total market capitalization for cryptocurrencies dipped over 13.2% to about $3.7 trillion, with losses nearing $1 trillion. Some altcoins suffered reductions in value between 80% and 90% as order books shrank.

The most substantial liquidations were seen in long positions, particularly for Bitcoin and Ethereum.

According to Bitfinex, much of the downturn can be traced back to aggressive selling on spot markets leading up to the tariff news announcement. The mismatched dynamics between buyers and sellers intensified the liquidation wave, revealing a frail market structure.

While the magnitude of liquidations was unprecedented, Bitfinex noted that Bitcoin’s drop wasn’t its most extreme in this cycle. The critical issue was the rapidity of the decline, which led to extreme shifts across multiple altcoins.

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Is There Still Hope?

Given that this liquidation event coincided with a traditionally positive period for Bitcoin, analysts remain hopeful for a quick recovery. However, major cryptocurrency assets must stabilize and maintain more restrictive price ranges over several weeks to ensure stability.

Bitcoin needs to regain and remain above $110,000, relying on continued spot buying pressure. A failure to hold this level may force it to revisit the lows reached on October 10.