Crypto Market Update: Sector Rebounds After US$20 Billion Liquidation Shock
By Giann Liguid | October 13, 2025, 9:05 AM PST
The cryptocurrency market staged a significant rebound over the weekend following a historic US$20 billion liquidation event earlier this week. Bitcoin (BTC) climbed back above the US$114,000 mark, while Ether (ETH) regained ground past US$4,000, signaling a partial recovery from one of the largest single-day selloffs in crypto trading history.
Market Movements and Price Recovery
Monday’s trading session reflected a renewed bullish sentiment after the sharp downturn on October 10, triggered by renewed tariff threats from US President Donald Trump against China. Bitcoin had plunged below US$109,000 during the volatility, falling from a record high near US$126,200 set just the prior week. As of early Monday, Bitcoin rose 2.2% to approximately US$114,200. Ether also showed resilience, trading at around US$4,105, after dipping as low as US$3,802 on Monday morning. Other major altcoins such as Solana (SOL) and XRP posted gains of 5.8% and 6.8%, respectively, climbing back from earlier losses during the turmoil.
The Liquidation Shock Explained
Data from CoinGlass and other market analysts revealed that over 1.6 million crypto trades were liquidated on October 10, resulting in forced sales totaling approximately US$19–20 billion across the market. This massive deleveraging primarily impacted leveraged long positions on Bitcoin and Ether and dragged altcoins like XRP, Dogecoin, and Cardano down by as much as 30%, triggering a cascading effect of liquidations.
Technical difficulties at Binance — including API failures and frozen withdrawals — compounded the crisis by impairing market makers’ ability to manage inventory and liquidity effectively. This led to abnormal price fluctuations and unreliable price discovery during the plunge.
OTC Trading Provides Stability
Over-the-counter (OTC) trading rooms became a critical stabilizing force amid the chaos, enabling institutional players to quietly execute large trades with tighter spreads. According to Finery Markets, OTC volumes surged 107% during the selloff, more than doubling the 48% volume growth reported on exchanges. This shift helped maintain liquidity and mitigate extreme volatility, as exchange markets experienced spreads fluctuating by up to 10%.
Bitcoin researcher Axel Adler Jr. commented that the October 10 event "changed the regime to moderately bearish," with technical indicators suggesting that the market has not yet reached capitulation levels. He noted that the Bitcoin Bull-Bear Structure Index fell by 8% and that a further decline would indicate sustained bearish pressure and the risk of retesting local lows.
Currently, Bitcoin’s market dominance stands at 56.01%.
Institutional Interest Remains Strong
Despite the volatile environment, institutional demand for digital assets continues to grow. Crypto funds recorded US$3.17 billion in inflows last week, with Bitcoin accounting for US$2.67 billion of that total, underlining its central role in institutional portfolios.
US spot Bitcoin exchange-traded funds (ETFs) attracted US$2.71 billion in inflows over the week, with standout products such as BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT) and Fidelity Wise Origin Bitcoin Fund (BATS: FBTC) leading the way. Notably, October 10 saw a modest US$159 million outflow, which analysts interpret as a sign that investors remained largely unfazed by short-term market shocks.
Year-to-date inflows into digital asset investment products have already reached a record US$48.7 billion, surpassing the full-year total for 2024, signaling robust and resilient capital rotation into the sector.
Dogecoin’s Nasdaq Listing Plans
In related industry news, the Dogecoin Foundation’s corporate arm, House of Doge, revealed plans to list on the Nasdaq stock exchange via a reverse merger with Brag House Holdings (NASDAQ: TBH). The move aims to bolster Dogecoin’s integration into traditional finance and retail payments.
CEO Marco Margiotta highlighted that going public would facilitate funding for new payment infrastructures, including a pending Dogecoin spot ETF with 21Shares and a treasury product already trading on the NYSE. The initiative is backed by notable investors, including Elon Musk’s attorney Alex Spiro and former Texas Governor Rick Perry.
Following the announcement, Dogecoin surged more than 10%. The deal is expected to close in early 2026. ### Market Sentiment and Outlook
The Fear & Greed Index currently reads 40, indicating a shift back to neutral market sentiment from last week’s "fear" levels. Investors are cautiously optimistic as the market digests recent events.
As the crypto sector navigates this period of increased volatility and macroeconomic uncertainty, market watchers will be closely monitoring technical signals and institutional flows to gauge the resilience of the nascent asset class.
Stay informed on the latest developments in cryptocurrencies and digital assets by following @INN_Technology for real-time updates.
Disclosure: The author holds no direct investments in the companies mentioned in this report.