Massive Liquidations Leave a Wound in Crypto
The crypto market weakened on Wednesday. Bitcoin hovered around $106,000, while Ether hovered at $3,700, continuing its decline after fading its early-month rally. Sentiment remained fragile as volatility remained high and risk appetite limited, with some market participants awaiting new clues from US macro data.
Selling pressure remained overshadowed by the early October “flash crash,” which triggered massive leveraged liquidations—tens of billions of dollars in a single day—and unstable capital rotation. The long-tail effects of the crash have maintained caution in derivatives and spot markets, making the rally disjointed and susceptible to correction. The market narrative now hinges on the direction of the US CPI and dollar/Treasury yield dynamics: a more benign inflation surprise could potentially ease yields and give crypto assets a breather, while “sticky” data could prolong the consolidation phase.
Thematically, a typically crypto-friendly October is heading toward one of the worst in a decade, underscoring the dominance of macro factors and liquidity panic. On the regulatory/idiosyncratic news front, legal headlines on politically themed tokens add noise and reputational risk to the sector. Looking ahead, the market is monitoring ETF/derivatives flows, stablecoin flows, and the US data calendar. Confirmation of softening inflation could trigger short-covering and a shift in sentiment, but without such a catalyst, prices are likely to remain range-bound near key levels.
Source: Newsmaker.id
