This week's crypto market review is marked by significant volatility, beginning with a historic crash followed by a rapid recovery, yet potentially indicating challenging times ahead.
Largest $500 Billion Crash and Liquidations in History
The week started with a sharp market crash, losing over $500 billion in market capitalization within days. More than $19 billion in positions were liquidated in a single day, marking the largest liquidation event in market history according to CoinGlass. This downturn, triggered by the escalating US-China trade war and threats of new 100% tariffs, combined with major players' risk reduction efforts, led to panic selling and a significant Bitcoin price decline from around $123,000 to $107,000, with similar losses for Ethereum and major altcoins. While long positions were predominantly liquidated, short trades also suffered. This volatility exposed systemic risks in managing trust-based centralized exchanges and thin-liquidity markets.
Market Recovery and Mixed Dynamics
Following the mid-week decline, the crypto market showed recovery—total capitalization increased by 4-5%, with Bitcoin trading around $113,000-$115,000 and Ethereum around $4,100. However, this trend comes with mixed signals: despite rising trading volumes, key indicators like funding rates suggest market participant hesitation and potential short-term decline. US cryptocurrency ETFs continue experiencing outflows, indicating restrained institutional investor confidence. Overall sentiment assessment remains cautious optimism with risks of further corrections amid geopolitical instability.
Hackers and Malicious Actors Incur Losses
Against the market crash backdrop, known hacker wallets holding stolen cryptoassets made errors attempting to "free up" liquidity, resulting in approximately $13 million in losses. They sold Ethereum at local lows and repurchased at higher prices, demonstrating panic behavior even among experienced malicious actors. This reflects the general complexity and risks of rapidly changing market conditions. Such trading likely also aimed at money laundering using market fluctuations.
Ripple and Combating Negative Myths
Ripple's Legal Director Stuart Alderoty challenged the common media myth that cryptocurrencies primarily serve criminal purposes. He stated that public blockchain transparency and traceability make them unsuitable for concealing illegal operations, while millions of Americans use crypto for real-world daily tasks—from payments to property verification. He also expressed hope that transparent regulations and education would improve industry perception and security.
Technical Updates and Industry Events
The week featured important technological developments: Ethereum Fusaka hardfork launch on testnet, zk-layer 2 Sandchain launch on Ethereum, announcement of Binance Chain Wallet browser extension discontinuation, and activity in decentralized finance and AI projects within blockchain environments. London hosted Digital Asset Summit 2025, gathering key market players.
Outlook and Expectations
Analysts maintain cautious optimism. Historical data and recent Bitcoin growth cycles suggest potential for new price peaks in late October to early November, despite current consolidation and temporary declines. This relates to expectations of strong rallies driven by institutional investors and favorable US regulatory initiatives. However, upcoming weeks carry high volatility risks linked to geopolitics and monetary policy.
Conclusion
The week demonstrated the crypto market's ongoing nature as a risky and volatile asset. Rapid sentiment shifts—from panic to recovery—affect all participants, from retail investors to hackers. Nevertheless, the industry continues developing: technological updates, institutional interest, and transparency promotion efforts indicate resilience. Beginners should remember high volatility, prepare for sharp fluctuations, and avoid excessive leverage. Cryptocurrency remains a next-generation tool with significant opportunities but requires conscious and cautious approaches.