The cryptocurrency market experienced an unprecedented "bloodbath" on October 11, 2025, with mainstream assets like Bitcoin (BTC) and Ethereum (ETH) plummeting sharply, triggering over $19 billion in liquidations, setting a historical record.

1. "TACO Diplomacy" Remarks Trigger High-Leverage Avalanche

In the early hours of October 11, 2025, the crypto market faced a black swan event, with mainstream assets like Bitcoin (BTC) and Ethereum (ETH) experiencing a flash crash. BTC dropped sharply by $19,000 within the day, hitting a low of $101,500, while ETH fell to a low of $3,355. The total liquidation across the network exceeded $19.1 billion, marking the highest single-day liquidation record since 2025. However, within just 48 hours, the market demonstrated remarkable resilience, with BTC rebounding above $115,000 and ETH reclaiming the $4,100 mark, with some assets even reaching new highs. This scene prompted industry insiders to reassess the nature of the bull market.

![After $19.1 billion in liquidations, is the foundation of the bull market shaken? New Fire CEO: The sharp drop may be a "stress test" for the bull market aicoin Figure 1](https://static.aicoinstorge.com/article/20251014/176041329266191.png "After $19.1 billion in liquidations, is the foundation of the bull market shaken? New Fire CEO: The sharp drop may be a "stress test" for the bull market aicoin Figure 1")​​​​​​​

New Fire Technology CEO Weng Xiaoqi analyzed that the direct trigger for the sharp decline was the market's "overreaction" to former U.S. President Trump's "TACO diplomacy" remarks. The deeper reason lies in the accumulated "high leverage" and "high floating profits" structure after continuous rises, which amplified systemic fragility. "The (plunge) liquidated a large number of institutional and large holder positions, bringing short-term liquidity pressure, but it also weakened the floating supply, creating space for future market development," Weng Xiaoqi pointed out. This judgment is corroborated by data.

A report released by CryptoQuant on October 13 indicated that the derivatives market became the hardest hit area in this round of deleveraging. However, at the same time, the net withdrawal of BTC from exchanges surged after the crash, showing that long-term holders and institutions were seizing the opportunity to acquire low-priced chips, without panic selling.

2. Sharp Declines as a Norm in Bull Markets, Fundamentals Remain Solid

In his latest statement, New Fire Technology CEO Weng Xiaoqi pointed out that the rapid rebound after this sharp decline is a typical characteristic of a bull market, rather than a turning signal, and his remarks are being initially validated by market trends. As of October 14, BTC had strongly rebounded above $113,584, and ETH had also returned to $4,162, nearly recovering all losses.

![After $19.1 billion in liquidations, is the foundation of the bull market shaken? New Fire CEO: The sharp drop may be a "stress test" for the bull market aicoin Figure 2](https://static.aicoinstorge.com/article/20251014/176041325451855.png "After $19.1 billion in liquidations, is the foundation of the bull market shaken? New Fire CEO: The sharp drop may be a "stress test" for the bull market aicoin Figure 2")

Senior commodity analyst Mike McGlone emphasized in a comment on October 13: "True bear markets often stem from a continuous contraction of liquidity and a gradual price decline, while this adjustment is more akin to a severe 'deleveraging.' The macro liquidity easing environment created by the Federal Reserve's interest rate cut cycle has not changed, and this remains the core logic supporting asset prices."

The robustness of the industry fundamentals is also crucial. Glassnode pointed out in its on-chain report on October 14 that this round of decline did not trigger large-scale sell-offs by long-term holders, and the on-chain health remains good. The report concluded: "This is a derivatives-driven liquidation, not a sell-off triggered by a collapse of confidence among spot holders."

Weng Xiaoqi also highlighted the supporting role of institutional cost lines on prices. For example, the price of ETH once fell below the average holding price of $4,500 for the well-known institution BMNR, providing a rare "discount" opportunity for funds that had not yet entered the market.

3. Future Outlook: Volatility Persists, Market Becoming "Desensitized"

In the short term, high volatility is expected to continue. Weng Xiaoqi also warned of the possibility of a "second bottom," indicating that the rebuilding of market confidence and the optimization of leverage structures will still take time. In the long run, political events such as Trump's remarks are gradually leading the market to become "desensitized."

Short-term risk warning: If the current price continues to fluctuate around $113,000 or falls below the key support level of $112,000, it may trigger a larger wave of selling.

Potential positive factors: Continuous oversold areas may stimulate short-term rebound demand. The price of gold reaching a historical high ($4,158 per ounce) may drive some market funds back to safe-haven assets like Bitcoin.

Bitcoin still faces significant downward pressure in the short term, while continuous institutional deployments indicate that investors remain optimistic about mid- to long-term value. Investors need to closely monitor market trends and technical indicators, flexibly adjusting their position strategies to cope with price volatility risks.

4. Respect the Market, Use Leverage Cautiously

Weng Xiaoqi emphasized that although short-term volatility persists, the industry fundamentals have not reversed against the backdrop of global liquidity release. However, investors need to be wary of leverage risks and respect the market. Comments from several authoritative media outlets point to the same core consensus: regardless of how the market evolves, respect for risk is always essential. Weng Xiaoqi reiterated that investors should "use leverage cautiously and always respect the market."

This $20 billion liquidation storm undoubtedly served as a profound risk education lesson for all participants. It clearly reveals that in the highly volatile crypto market, excessive leverage is a major driver of rapid wealth evaporation. True investment wisdom lies in grasping the big trends while constantly managing potential downside risks.

The road ahead will still not be smooth, but the market foundation, tempered by trials, may become more solid.

Join our community to discuss and grow stronger together!

Official Telegram community: https://t.me/aicoincn

AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX benefits group: https://aicoin.com/link/chat?cid=l61eM4owQ

Binance benefits group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。