On 10 October 2025, the crypto-asset market underwent a veritable liquidity stress test, triggered by Donald Trump's surprise announcement that he would reinstate 100% tariffs on Chinese imports.

This exceptional episode sent immediate shockwaves across all trading platforms, revealing the structural weaknesses of an ecosystem that is still highly centralised and dependent on a few dominant players — with more than a third of global volumes concentrated on Binance alone.

As the market now attempts to rebuild its liquidity and re-establish medium-term momentum, this sequence calls for a deeper analysis:

Understanding the real causes of the dislocation, measuring the degree of resilience of the infrastructure, and placing the event in the broader context of the underlying bullish trend driven by Bitcoin, Ethereum and the benchmark assets of the crypto-asset market capitalisation.

1. The Liquidity Crash

On Friday, 10 October 2025, the cryptocurrency market experienced one of its most violent episodes in recent years. In less than an hour, Bitcoin lost nearly 18%, Ethereum lost about 22%, and the majority of altcoins saw their value plummet by 30% to more than 70%.

According to data compiled by CoinGlass, more than $19.5 billion in derivative positions were liquidated across all centralised platforms within 24 hours — a record since March 2023.

On the decentralised side, DefiLlama estimates cumulative liquidations at nearly £480 million, concentrated mainly on the Aave and Morpho protocols — less than 3% of the total observed, confirming the greater stability of the on-chain segment in the face of the shock.

The trigger: a political announcement and insider trading

The trigger for this brutal stress test came from the political arena: Donald Trump announced the introduction of 100% tariffs on all Chinese imports, effective from 1 November 2025.

This measure, reported by Bloomberg and Reuters [1, 2], marks the open resumption of the Sino-American trade war after several months of calm.

The new tariffs mainly affect technology products, rare metals and industrial equipment. Trump justified this decision by citing the need to protect American industry from what he considers to be unfair practices by Beijing.

The announcement immediately caused a global liquidity shock:

the offshore yuan depreciated against the dollar, the VIX (US volatility index) soared by nearly 30%, and gold jumped to a new all-time high, triggering a sharp rebalancing of risk portfolios.

On the crypto markets, which were open at the time of the announcement, the reaction was instantaneous: investors arbitraged massively towards the dollar and stablecoins, triggering a series of forced sales on BTC and ETH, and chain unwinding on derivatives.

Insider trading: An anomaly before the announcement

Even more troubling: several institutional players, including QCP Capital and Kaiko, observed the opening of a short position of approximately $400 million on Bitcoin futures contracts fifteen minutes before Trump's public announcement.

This sequence of events, atypical in its timing, generated: violent selling pressure on order books, a local collapse in prices on several aggregators, and spread differences exceeding 3% between major platforms (Binance, Bybit, OKX).

A key question: information and manipulation

How could a position of this magnitude have been opened just before a political announcement of this nature?

Three hypotheses dominate:

- Privileged access to information: certain operators close to American political circles may have obtained information about the speech before it was made public.

- Ultra-low latency algorithmic arbitrage: automatic strategies correlating media signals, social networks and government feeds may have detected and anticipated the announcement.

- Anticipated macro hedging: a systemic fund may have chosen to protect itself against a protectionist shock scenario by initiating massive shorts on risky assets.

Whatever the cause, this episode reveals a structural vulnerability: the extreme sensitivity of the crypto market to marginal liquidity and the concentration of a few dominant players such as Binance and Bybit.

2. Market structure and liquidity disruption

The incident of 10 October 2025 exposed the structural flaws in crypto liquidity.

Unlike traditional finance — where order book depth is ensured by multiple market makers, clearing houses and regulated stabilisation mechanisms — crypto liquidity relies on a fragmented but interconnected ecosystem dominated by a handful of centralised players.

CEX (Centralised Exchange): Over-reliance on cross-exchange liquidity causes chaos

The major exchanges (Binance, Bybit, OKX, Coinbase, Kraken) operate on separate order books, but these are closely correlated by liquidity aggregators and cross-exchange market makers.

When a violent shock occurs on one of them, hedging algorithms deactivate their quotes to avoid unfavourable arbitrage.

The result is immediate:

- order book depth disappears simultaneously on several platforms;

- prices become inconsistent from one market to another;

- data aggregators (CoinMarketCap, TradingView, Kaiko) struggle to display a reliable average price for several minutes.

➡️ This ‘stress test’ serves as a reminder that the crypto-asset market remains exposed to unregulated propagation mechanisms, where a single systemic position can, through a domino effect, destabilise price formation without the need for widespread panic.

On 10 October, this interdependence caused a cascade of desynchronisation on the main exchanges.

Some users were unable to access the market, even with orders already set up in advance.

Several platforms — including Binance and Bybit — reported major malfunctions in their APIs and a temporary suspension of market order execution, further exacerbating the loss of reference points for traders.

Derivatives markets: the mechanics of amplified risk

On derivatives platforms (futures and perpetuals), the situation was even more critical.

With the majority of positions being highly leveraged (x10 to x100), the fall in the spot price triggered a chain reaction of automatic liquidations, amplifying selling pressure.

In less than 45 minutes:

· more than $8.6 billion was liquidated on the BTC futures markets;

· thousands of long positions were deactivated by margin calls;

· and some winning short positions could not be executed as counterparty systems lost all price consistency.

This failure reveals a fundamental limitation of CEXs: price formation on derivatives depends on spot stability—not the other way around.

When the spot price becomes inconsistent due to a lack of real liquidity, liquidation algorithms continue to execute mechanically, forcing sales at any price, regardless of fundamental value.

As a result, several derivatives platforms briefly displayed inaccurate prices—up to 5% below the aggregate market—before returning to normal, generating very real losses for some traders.

This distortion was enough to cause a complete dislocation of liquidity: the price of Bitcoin briefly diverged by more than $2,000 between different spot markets, with market makers partially suspending their hedging algorithms for several minutes.

3. Market maturity of digital assets

The episode of October 10, 2025, acted as a full-scale stress test for the crypto ecosystem.

Behind the apparent volumes of derivative instruments, this event highlighted a structural fragility: that of a market whose liquidity still relies heavily on centralized, interconnected infrastructures that lack stabilization mechanisms comparable to those of regulated markets.

An illusion of depth, structural fragility

On the surface, the total market capitalisation of cryptocurrencies exceeds £2.5 trillion, and Bitcoin is now considered an institutional asset.

However, the amount of liquidity that can actually be mobilised — i.e. the volume that can be traded without affecting the price — remains negligible.

On most platforms, the order book depth at 1% of the price represents less than 0.5% of the capitalisation of the token concerned.

In other words, a few tens of millions of pounds are enough to significantly shift the price of assets considered ‘major’.

During the shock of 10 October, this surface liquidity instantly evaporated, revealing a market structure that was more speculative than truly capitalised: an environment where price is often only a function of available liquidity, not the fundamental value of the asset.

Opaque intermediation

The market dislocation also highlights a central question: who controls price formation?

Even today, the majority of transactions remain concentrated among a few players:

Privileged market makers, operating under exclusive contracts;

Exchanges that control flows, quotes and data;

Aggregators whose calculation methodologies vary depending on the source.

This intermediation model maintains an illusion of liquidity.

Artificial volumes, order books fed by robots and wash trades create a false market dynamic.

On 10 October, when hedging algorithms stopped quoting, real liquidity evaporated, exposing the highly centralised nature of a system that claims to be free of centralisation.

Exchange platforms without safeguards

Unlike traditional regulated markets, centralised digital asset exchanges still lack protective mechanisms:

- no circuit breakers to suspend trading in the event of panic,

- no clearing houses to cushion counterparty defaults,

- no ex post supervision of execution conditions.

This structural vacuum transforms every liquidity shock into a potential systemic crisis.

The losses recorded on 10 October were not solely the result of falling prices: they reflect a systemic leverage effect, amplified by derivatives, lending protocols and interconnected aggregators.

The lesson of the stress test

This episode reveals that, outside the ten main assets on the market, there is no real defined price.

Most altcoins lost between 60% and 90% of their value in a matter of minutes, even before redemption flows recovered.

Such a disruption would be impossible in a traditional regulated environment, where liquidity is guaranteed by multiple intermediaries and where the temporary suspension of trading acts as a firewall.

The stress test on 10 October demonstrates that, despite technical progress, the crypto market is still not fully mature:

- Liquidity concentrated among a few players,

- Technical governance that remains opaque,

- And excessive dependence on inter-platform trust.

Caution and risk reassessment

For investors, the lesson is clear: diversification in crypto should not be confused with speculative dispersion.

The risky portion of a portfolio — whether altcoins or derivatives — must be managed rigorously, with strictly controlled management ratios.

Without discipline and leverage control, total capital loss can occur in seconds, even when technical safeguards (stop orders, limits, hedging) are in place.

Beyond Bitcoin and Ethereum, most digital assets suffer from shallow market depth, high structural volatility and often underestimated counterparty risk.

The value of a digital asset does not lie in its stated capitalisation, but in the strength and sustainability of its liquidity across all exchanges. A liquidity crisis of this magnitude cannot be considered a mere technical anomaly: it calls into question the very ability of the market to protect invested capital.

4. Technical analysis: Bitcoin (BTC) after the October 10 stress test

The dislocation episode of October 10, 2025 had a profound impact on the technical structure of the market.

Despite the violence of the movement, medium-term configurations remain consistent: the shock did not call into question the primary bullish trend that had been in place since the second half of 2024, but it did reset the momentum and redefine investor confidence zones.

The main strategic support zone – identified in our previous scenario as the DCA Smart Zone (Strategic) – was almost reached within minutes at the peak of the stress test.

In our latest analysis, the tactical level of $111,000 remained intact at the daily close, despite an extreme test of the $101,000 zone, corresponding to the tactical alternative scenario. 

BTC/USDT 
Daily chart Basis 

Current situation

Spot price: $114,000

Dominant structure: bullish consolidation after liquidity purge

RSI (21 days): 47.6 – normalising

Volatility (7 days): 41% annualised (compared to 92% at the peak on 10 October)

The structure observed corresponds to an orderly technical correction in a long-term bullish cycle.

The gradual rebound around the 89-day moving average (EMA 89) at $114,000 confirms that the market has absorbed the shock without any structural break for the moment.

Technical reading

Maintaining the price above $111,000 at the daily close remains the critical pivot point for the bullish scenario in the coming hours/days.

– A tolerance zone of up to $109,000 is defined for hourly trading (session). –

However, the post-stress test update leads us to conclude that we will have to wait for the traditional markets to fully reopen this week to confirm or invalidate the continuation of the bullish momentum above this threshold.

A sustained slide below £111,000/£109,000 would pave the way for a deeper return to the strategic DCA Smart Zone, between £101,000 and £88,000 maximum, which is the technical convergence zone between the oblique support and the medium-term liquidity cluster.

For now, a sideways stabilisation scenario remains the most likely:

The damage to inter-exchange liquidity has temporarily weakened the market's directional momentum, limiting the ability of prices to immediately resume their upward trajectory.

Thus, a consolidation phase between the previous highs (≈ £129,000) and the £111,000/£109,000 support zone appears to be the most likely scenario.

This sideways movement should precede a gradual bullish recovery towards £140,000, the main strategic target for the current cycle.

Disclaimer: The content of this analysis should not be considered a study, investment advice or a recommendation regarding specific products, strategies or investment opportunities. This content is strictly for illustrative, educational or informational purposes and is subject to change. Investors should not base their investment decisions on the content of this site and are strongly advised to seek independent financial advice for any investment they are considering.