Crypto Markets Bounce Back as Panic Selling Eases

At the beginning of the new week, Bitcoin recovered from a severe drop and rose by 3%, reaching $114,734. This rise followed its dip below $105,000 between Friday and Saturday. Ethereum also rebounded, witnessing an 8.5% increase to $4,132 after declining to around $3,500 over the weekend. According to Coinglass data, Friday saw over 1.6 million investors liquidated, with total liquidations escalating to $19.1 billion. Geopolitical and trade factors were central to the wave of selling in both cryptocurrencies and global markets.

Triggers Behind the Panic Selling

Rick Maeda from the research firm Presto Research noted that the panic selling wasn’t unique to cryptocurrencies. It was triggered by China’s export restrictions on rare earth elements and the subsequent shock from Washington’s 100% tariff plan on Chinese technology imports. Falling liquidity conditions over the weekend accelerated chain liquidations in leveraged positions, causing prices to plummet dramatically.

After leverage clearance, automated trading mechanisms and the ceasing of panic selling highlighted recovery purchases. Maeda emphasized that the rebound was partly mechanical, with the cascade effect halting post-leverage clearance. Pricing concern over tariff risks also lessened. On Polymarket, the probability of a 100% tariff going into effect by November 1, 2025, stands at only 17%. Nonetheless, the trauma from record-scale liquidations could suppress short-term risk appetite.

“Uptober” Thesis: Will the Trend Persist?

Vincent Liu, Investment Director at Kronos Research, stated that with the leverage reset and calmed tariff news flow, liquidity returned, and panic shifted to controlled risk-taking. Traders, according to Liu, are monitoring trend lines, the dollar index, and tariff headlines for the permanence of the reaction.

Nassar Achkar, Strategy Officer at CoinW, noted that the “Uptober” narrative, characterized by this month’s rise, is still in place. Directions will clarify with institutional ETF inputs, the upcoming US CPI data, and the Fed meeting. Nick Ruck from LVRG Research observed strengthening whale accumulation within Ethereum and the emergence of technical indicators pointing to bottom confirmation in some oversold altcoins.

Maeda remarked that while the trend has been dented, it hasn’t gone off track. However, sensitivity to new headline disruptions on the US-China front is heightened.

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