After the Storm: Crypto’s Liquidity Shock Tests Market Integrity || Oct 11, 2025
Massive flash crashes expose structural cracks — but underlying trend may remain intact
🪙 Crypto Market Overview
Yesterday’s sell-off was one of the most chaotic and disheartening events of this bull cycle. Bitcoin and major altcoins plunged in a wave of forced liquidations and exchange instability — a move that many traders deemed unfair and systemically broken.
Top 20 altcoins saw instantaneous drops of 50%–80% in a single candle, levels that should be virtually impossible in a mature market environment. Yet here we are — reminded that in crypto, structural risk is always part of the game.
Still, amid the carnage, there are several technical reasons to believe that the bull market structure is not broken — only shaken.
📊 Some Hope
Encouraging signs are emerging from the spot market order books, where large buy bids have started to appear — the kind of defensive positioning last seen during the U.S.–Iran–Israel crisis earlier this year. This implies that deep-pocketed players are stepping in to defend key support zones.
On-chain metrics also paint a constructive picture:
Daily Active Addresses (DAA) surged during the sell-off, signaling bullish divergence. Historically, such setups have led to recoveries back to the divergence origin — near 122,000 USD for Bitcoin.
The Crypto Total Market Cap has reclaimed its long-standing price channel, suggesting that buyers continue to defend the trend and that a push toward the top of the range remains possible.
🔍 Other Clues
Technically, yesterday’s wipeout may have simply fulfilled long-term pattern requirements before setting up the next leg higher.
The megaphone formation in the total market cap chart completed its downside test near 3.2–3.4T USD, clearing the way for a potential move toward the upper boundary in the months ahead.
The USDT Market Cap dominance chart confirmed a bearish retest of its neckline, hinting that crypto assets could double from current levels once the dust settles.
🌐 ETH Watch
Ethereum (ETH) held up better than most altcoins during the chaos. It completed its earlier warning move toward the 3,650–3,500 USD zone, where a bullish reversal structure now appears to be forming.
If this base holds, ETH could resume its climb toward the 6,000 USD target, though maintaining weekly support around the bull market support band is crucial.
A break to new lows would shift focus to the 3,100 USD area as the next line of defense.
🎯 Strategy Outlook
Short-Term (Days): Pending. Recent stop losses were hit during the flash event. New setups will depend on BTC stabilizing above 115K–119.6K.
Medium-Term (Weeks): Long bias remains valid; structure improves with a close back above 120K. Profit zone remains 140K–160K.
Long-Term (Months): Cycle projection toward 230K unchanged unless 72K fails.
🧭 Strategy Notes
The sell-off appears mechanical and liquidity-driven, not fundamentally justified.
Spot order book demand and on-chain divergences point to recovery potential.
Expect volatility to remain high until market confidence is restored.
Monitor the U.S. stock market open Monday for macro spillover effects.
🔑 Key Takeaways
Historic flash crash in top altcoins raises questions about exchange stability
Large spot bids reappearing, hinting at institutional defense zones
Market cap and DAA divergences favor a medium-term recovery
ETH holding firm near reversal zone; risk/reward turning favorable
Watch BTC 115K–119.6K range for stabilization signals
🔔 Premium Signals 👉 Access premium signals
This newsletter is published daily on Substack.
Early issues are free — later editions will be subscriber-only.