Crypto market analysts predict a medium-term rebound for Bitcoin to $130,000 and Ethereum to $4,800 after the October 10 flash crash liquidated $19 billion in positions.
Speaking with Yellow.com, experts say that weak hands have been eliminated and the stage has been set for renewed accumulation driven by institutional inflows.
The crash, triggered by President Donald Trump's announcement of 100% tariffs on Chinese imports and export controls on rare earths, erased nearly $600 billion in market capitalization as Bitcoin plunged from $122,000 to $105,000 and altcoins suffered up to 90% drawdowns.
Over 1.6 million traders lost leveraged positions, primarily on centralized exchanges, in the largest single-day liquidation in crypto history, surpassing the $1.2 billion COVID crash and $1.6 billion FTX collapse by over 15 times.
Marcin Kazmierczak, co-founder of RedStone, described the downturn as a real market event rather than an exchange anomaly, noting that crypto absorbed panic selling after traditional markets closed. "When President Trump announced 100% tariffs on China around 5:00 PM ET on Friday, October 10th, crypto markets became the sole outlet for global investors to express their shock," he said.
With U.S. markets shut for Columbus Day, digital assets like Bitcoin, Ethereum, and Solana faced the full brunt, resulting in $19.1 billion in liquidations per CoinGlass data.
Kazmierczak highlighted the vulnerability of perpetual contracts on centralized exchanges, where opaque liquidation engines amplified cascades.
DeFi fared better due to reliable oracles which aggregated prices across venues to avoid flash crash distortions. Kazmierczak emphasized that the event reveals crypto's exposure as a 24/7 market without circuit breakers, urging risk desks to model isolated shock scenarios.
Looking ahead, Kazmierczak views the crash as a pivot toward balanced strategies.
"The October 10th crash may be remembered as the event that shifted sentiment from maximum risk-seeking to a more balanced approach incorporating low-risk strategies, a maturation the crypto market desperately needs," he stated.
He advocated for the Low-Risk DeFi movement, offering 4-10% yields via established protocols as stabilizers against perps and memecoin speculation.
QCP Capital attributed the turmoil to escalating U.S.-China tensions, with Trump's post accusing China of holding the world captive via export restrictions, followed by White House tariffs on all Chinese imports. This sparked a global risk-off wave, with Nasdaq down 3.5% and S&P 500 off 2.7%, while Bitcoin hit $102,000 lows and implied volatility spiked to 98 before easing to 50.
Extreme dislocations on Binance, USDe to $0.65, wBETH 90% below parity, BNSOL over 80%, prompted suspicions of coordinated exploits tied to recent system updates.
Stabilization came via Vice President JD Vance's comments on openness to negotiation, but QCP warned of defensive positioning amid thin liquidity and elevated policy risk.
"Prices should stabilize for now as markets await China’s response," the firm stated, with short-dated volatility persisting into the week.
Ryan Lee, chief analyst at Bitget, pinned the crash on macroeconomic pressures from trade war escalation, accelerating deleveraging to $20 billion in liquidations.
While short-term tests of $100,000 for Bitcoin and $3,600 for Ethereum loom, Lee called it a healthy correction.
"Over the medium term, we see Bitcoin rebounding to $130,000 and Ethereum climbing to $4,800, supported by sustained institutional inflows through ETFs and DATs," he said.
Lee stressed disciplined risk management in fast-moving markets, noting the purge targeted crypto natives on centralized exchanges rather than retail.
Bitget plans to enhance tools for navigating volatility as the ecosystem matures toward sustainable growth.
The consensus among experts points to deleveraging as a foundation for recovery, with institutional demand and risk-adjusted strategies mitigating future shocks in crypto's interconnected landscape.
