In 2025, the prices of Bitcoin and Ethereum experienced 'flash crashes' twice shortly after reaching new highs.
On October 10, the BTC price briefly dropped to a low of $101,200 before rebounding, with a single-day decline of 6.56%. As of this writing, the price is fluctuating around $110,000; the ETH price briefly dropped to a low of $3,344 before rebounding, with a single-day decline of 11.95%.
Not long ago, on October 6, BTC hit a new all-time high of $126,200, while ETH, after reaching a new high of $4,959 on August 24, continued to oscillate, only returning above $4,700 on October 7.
This is not the first time. In early 2025, BTC and ETH also experienced 'flash crashes' shortly after reaching new highs.
On February 3, the BTC price plummeted to $91,201, with a daily fluctuation of approximately $11,300, while the ETH price dropped to $2,120, with a daily fluctuation of approximately $800. Not long before, on January 20, the BTC price had just surpassed the previous all-time high of $109,640.
Following their new highs on February 3, BTC and ETH experienced flash crashes and quickly rebounded but ultimately failed to hold their positions, leading to a continuous decline thereafter. BTC and ETH kept falling until early April when BTC reached a low of $74,508 and ETH fell to a low of $1,385 before starting to rebound.
From a news perspective, the main reason for this round of flash crashes was Trump's renewed imposition of tariffs.
It was a day of black swan events not only for cryptocurrencies but also across global capital markets. The S&P 500 Index closed down 182.61 points, or 2.71%, on October 10, marking its largest weekly decline since May. The Nasdaq Index plummeted 3.5%, recording its steepest single-day drop since April 10. The Hang Seng Index futures night session closed 5% lower. The FTSE China A50 Index futures night session fell 4.26%, both experiencing cliff-like declines.
Will this round of BTC and ETH flash crashes result in a similar pattern to the February market, where prices continuously decline after a bull-to-bear turning point, or will they rebound after a brief adjustment?
Is this flash crash a 'bull-to-bear turning point' or a 'buying opportunity'? — Comparison with the February 3 flash crash
Although BTC and ETH rebounded after the sharp fluctuations in February, they quickly fell back due to the drag of expectations of an interest rate hike by the Federal Reserve. Thereafter, the tariff conflict in March and April further intensified, causing BTC and ETH to continue falling until the conflict gradually eased, leading to a sustained rebound and climb to new highs.
A comparison of the two sharp fluctuations shows that this 'sharp fluctuation' has many similarities with the one in February but also significant differences, mainly in terms of the macro environment and on-chain accumulation.
Similarities between the two sharp fluctuations:
The news catalysts were similar, both being Trump's 'tariff threats.' On February 1, U.S. President Trump formally signed a policy at his estate to impose new tariffs on China, Mexico, and Canada. Since it was during the Lunar New Year holiday, the news did not fully ferment until February 3. On February 10, Trump again threatened to impose tariffs on China, and the news rapidly escalated, causing a plunge in global risk assets.
Cryptocurrencies had just set new all-time highs, with massive leverage trading volumes, resulting in high liquidation amounts during the sharp fluctuations.
As of 10:00 AM on February 3, according to Coinglass data, the total liquidations across all cryptocurrency exchanges in the past 24 hours amounted to $2.028 billion, including $1.766 billion in long positions and $270 million in short positions. A total of 700,000 traders globally were liquidated.
As of 8:00 AM on October 11, according to Coinglass data, total liquidations across all cryptocurrency exchanges in the past 24 hours surged to $19.141 billion, setting another new historical record. Globally, 1.62 million traders were liquidated, with $16.686 billion in long position liquidations and $2.455 billion in short position liquidations. In terms of individual cryptocurrencies, Bitcoin liquidations totaled $5.317 billion, while Ethereum liquidations reached $4.378 billion.
Two needle insertions atTechnicallyBoth analyses are reasonable.RSIThe indicators are overbought. Taking ETH as an example, before the plunge on February 3, ETH's RSI indicator had reached a high of 68.77, and before the plunge on February 10, ETH's RSI indicator had reached a high of 78.34.
Differences between the two sharp fluctuations:
The macro environment differed: February was during the Fed's hawkish interest rate hike cycle, while the current period is at the beginning of a rate-cutting cycle.
The minutes of the Federal Reserve's meeting at the end of January showed that inflation data exceeded expectations. According to the January inflation data released by the US Bureau of Labor Statistics, the year-on-year growth rate of CPI was 3.00%, compared with the previous value of 2.90% and the expected value of 2.90%. The inflation data significantly surpassed both expectations and the previous value, further diminishing the already slim prospects of an interest rate cut. Following the release of the data, according to CME data, the probability of the Federal Reserve maintaining interest rates in the range of 4.25%-4.50% in March was 92%. The unexpected rise in inflation data weighed on risk assets, continuing to suppress macroeconomic risk appetite.
On October 11, 2025, data from the CME's 'FedWatch' tool indicated that the probability of the Federal Reserve cutting interest rates by 25 basis points in October rose from 94.6% to 98.3%, while the likelihood of cumulative rate cuts totaling 50 basis points by December reached 97.8%. The minutes from the Federal Reserve’s September meeting revealed significant internal disagreements regarding the path of interest rate cuts. Officials such as Fed Governor Christopher Waller expressed support for rate cuts, citing the need to address weakness in the labor market, but emphasized the importance of carefully balancing the risks of inflation.
The cryptocurrency market faces a different policy environment, as many policies remained uncertain shortly after Trump assumed office in February.
At the beginning of February, shortly after Trump took office, policies related to the cryptocurrency industry were still in their early stages, focusing primarily on “suspending enforcement” to reduce industry uncertainty. By October, under Trump’s promotion, the global cryptocurrency industry entered a policy “honeymoon period.” The GENIUS Act (Stablecoin Innovation Act) was officially passed in July 2025, and Hong Kong's Stablecoin Regulations also came into effect in August. Cryptocurrencies gradually became part of mainstream asset investment portfolios.
The composition of investors shifted as the market, which had been dominated by retail investors in February, gradually transitioned to being driven by ETF holdings and institutional players.
According to data from sosovalue, there has been a sustained net inflow of funds into Bitcoin spot ETFs and Ethereum spot ETFs. From March to October 2025, Bitcoin spot ETFs recorded cumulative net inflows of $25.8 billion. According to statistics from BitcoinTreasuries.com, as of October 8, a total of 251 entities (including publicly listed companies) held Bitcoin, accounting for 17.82% of the total Bitcoin supply.
On-chain data indicates that the exchange supply of BTC and ETH has significantly decreased relative to February.
In October 2015, the exchange supply of BTC continued to decline relative to February, with clear signs of accumulation by listed companies. Meanwhile, ETH in February faced multiple challenges, including reduced staking volumes and concerns over inflation, leading to high exchange supplies and significant selling pressure. However, since July 2025, as companies like BMNR and SBET joined the trend of corporate accumulation of ETH, the exchange supply of ETH dropped to its lowest level since 2016 in October, significantly reducing retail selling pressure.
From a technical perspective, BTC remained above the 200-day moving average support in February, while in October there was a 'false breakdown' below the 200-day moving average support. ETH broke below the upward trendline and the 200-day moving average support in February but stayed above the 200-day moving average support in October.
Currently, whether considering the macro environment or on-chain data, this 'flash crash' has provided stronger bullish signals; however, stabilization after the sharp decline will still require time to recover.
Investment Insights: The Benefits of Spot Trading and the Prudent Use of Leverage
On October 11, CZ reposted a viewpoint from Quinten, co-founder of weRate, on social media:
“During the COVID-19 market crash, $1.2 billion was liquidated; during the FTX collapse, $1.6 billion was liquidated; today, $19.31 billion has been liquidated. People wished they had bought during the COVID crash, and this is now the equivalent of that crash.”
For individual investors, the most important thing is not constantly chasing high returns but ensuring survival.
When a black swan event occurs, only those who remain in the game have the opportunity to buy at the bottom.
The advantages of spot trading: Long-term holding avoids the risk of margin liquidation.
Whether immediately buying the dip or waiting for clarity through regular investments, holding BTC and ETH spot over the long term can withstand the test of time.
Editor/Doris
