October's brutal crypto crash resets the stage — is a bullish Q4 comeback still possible?
October 2025 was meant to be a month of celebration in crypto, but it ended up as one of the most violent wipeouts in history. Bitcoin hit a dazzling all-time high of $126,296 only to suffer its worst liquidation event ever days later—over $19 billion wiped out and market sentiment shattered. As we move into November, the big question remains: Can Bitcoin still rally to new highs before year-end, or is the bullish Q4 dream dead? In this article, I’ll break down what happened last month, examine the macro and institutional factors at play, and explore what 2025’s final quarter might hold for crypto investors.
What Went Wrong in October? Anatomy of the $19 Billion Liquidation
October started strong. Historically, October is Bitcoin's best month, averaging gains over 20% in 10 of the past 12 years. The bulls were confident, institutional demand was rising, and Bitcoin cracked $120,000. Then on October 6, Bitcoin peaked at $126,296, firing up the market and liquidating nearly $100 million in short positions in just an hour.
But that bullish euphoria was fueled by excessive leverage. On October 10, a sudden geopolitical shock triggered a market meltdown. Former President Trump announced a 100% tariff hike and export controls on software in the escalating US-China trade war. Crypto, which trades 24/7, reacted instantly.
- $7 billion wiped out in leveraged positions within the first hour
- More than $19.37 billion liquidated within 24 hours
- 1.6 million traders wiped out
To put that in perspective:
- The FTX collapse in 2022 triggered $1.6 billion in liquidations
- The March 2020 COVID panic wiped out $1.2 billion
This single event was more than ten times larger. Coin Glass, a crypto analytics firm, called it the largest single-day liquidation in history, with some estimates nearing $40 billion when accounting for delayed reporting.
Bitcoin plunged 18% from $126,000 to just above $14,000 briefly. Ethereum fell over 20%, breaking below $4,000. Altcoins were devastated: mid and small caps like Solana, Dogecoin, and XRP lost 60–80%. Some coins, like Cosmos, nearly flash-crashed to zero before bouncing back.
The Crypto Fear and Greed Index nosedived from a greed reading to extreme fear at 22, revealing widespread panic.
A Silver Lining? Why October’s Crash Might Be a Needed Market Reset
Despite the carnage, experts see this crisis not as systemic failure but as a controlled detonation that wiped out reckless leverage. Over $65 billion in open derivative interest reset to early 2025 levels, but crucially:
- No major exchanges or funds went insolvent
- Core infrastructure remained intact
- Institutional appetite, surprisingly, held firm
This deleveraging could leave behind a healthier, stronger foundation for a sustainable rally going forward.
Macro Tailwinds: The Fed’s Pivot and Liquidity Influx
The Federal Reserve’s Oct 29 meeting added another twist. The Fed cut rates by 25 basis points and announced it would end Quantitative Tightening (QT) on December 1, which means the central bank will stop shrinking its balance sheet. Lower rates and the end of QT normally pump liquidity into risk assets like crypto.
But markets sold off—Bitcoin slipped below $110,000—because Fed Chair Powell signaled that future rate cuts weren’t guaranteed. Even so, the general macro trend points to easier money ahead. Markets price in a decent chance of another rate cut in December.
The end of QT is a big deal: it removes a massive liquidity drain and could set the stage for a wave of renewed investment in risk assets, including crypto.
Institutional Demand Remains Resilient
Even amid October’s crash, institutional investors kept buying. For example, Bitcoin ETFs saw net inflows exceeding $22 million on October 28, days after the liquidation event. Ethereum ETFs added $246 million. This is not just impulsive retail FOMO but strategic buying from capital allocators buying high-quality assets on discount.
This resilience signals a maturing market where “smart money” is exploiting volatility instead of fleeing it.
Bitcoin and Ethereum: Can They Still Hit New All-Time Highs by December?
The short answer: yes, but it won’t be easy. Here’s the bull case:
- VanEck forecasts Bitcoin near $180,000 by year-end
- Standard Chartered projects up to $200,000
- Both rely on sustained ETF inflows, improved liquidity, and no fresh geopolitical shocks
Technically, Bitcoin has been defending support around $108,000–$110,000. If that holds, targets of $119,000 and then $131,000 are plausible.
For Ethereum, sentiment looks even stronger, boosted by expectations around the Fusaka network upgrade coming in November. Analysts put a 65–70% chance of Ethereum revisiting $5,200–$6,000 by December.
What About Altcoins? Is Altseason Still Possible?
October was a flight to quality—Bitcoin dominance jumped to 59%, the highest in months. The altcoin season index collapsed from near altseason territory (70) down to 26, firmly Bitcoin season.
Why? Two reasons:
- In stress, capital flees risky altcoins to Bitcoin’s safety
- The rise of Bitcoin ETFs and corporate treasury buys pulls institutional money away from altcoins
Does this mean altseason is dead? Not quite. Historically, alt rallies follow Bitcoin and Ethereum pumps. We’re in phase one: Bitcoin leads, then ETH, then altcoins. If macro liquidity improves and Bitcoin holds its ground, selective altcoin rallies around high-quality projects could happen late Q4. ---
Risks / What Could Go Wrong?
- Another major geopolitical shock could shatter fragile investor confidence
- Fed could maintain or raise rates, cutting liquidity further
- Failure of Bitcoin to reclaim or hold key support near $110,000 might extend bearish consolidation into 2026
- Persistent regulatory crackdowns or exchange instability could undermine market recovery
- The altcoin sector remains vulnerable, especially small caps without real utility
Data Callout: The Scale of October’s Crypto Liquidations
- $19.37 billion liquidated in 24 hours, 10x larger than FTX crash and COVID panic combined
- 1.6 million traders wiped out
- Bitcoin fell 18%, Ethereum 20%, some altcoins lost up to 80% in a flash crash
This was crypto’s largest ever forced deleveraging event, reshaping market dynamics going forward.
Actionable Summary
- October 2025’s crash was historic in scale but potentially a necessary deleveraging reset
- Federal Reserve ending QT on December 1 should boost liquidity and risk appetite
- Institutional investors remain confident, buying dips even post-crash
- Bitcoin and Ethereum can still exceed all-time highs, but the path is narrow and depends on macro and geopolitical factors
- Altcoin season is unlikely immediately but selective quality projects could rally if Bitcoin leads a sustained recovery
If you want to stay ahead of these volatile shifts and see exactly how insiders position their portfolios, get the full playbook and entries in today’s Wolfy Wealth PRO brief.
Frequently Asked Questions
Q: Why did October 2025 see such an extreme crypto crash?
A: A geopolitical shock—US trade war escalation with China—triggered a massive forced deleveraging of over $19 billion in leveraged crypto positions. Excessive leverage and panic selling drove prices down sharply.
Q: Can Bitcoin still reach new all-time highs this year?
A: It’s possible but challenging. Sustained institutional inflows, improving Fed liquidity conditions, and holding key technical support levels are crucial for a rally back above $126,000. Q: What is Quantitative Tightening (QT), and why does its end matter?
A: QT is when the Federal Reserve shrinks its balance sheet, removing liquidity from markets. Ending QT means more liquidity available, which can support asset prices including cryptocurrencies.
Q: Is altseason over for good?
A: Not necessarily. Altcoin rallies usually follow Bitcoin and Ethereum showing strength. While immediate prospects look bleak, quality altcoins with strong fundamentals could see selective gains if market sentiment improves.
Q: How did institutional investors react to the crash?
A: Despite volatility, Bitcoin and Ethereum ETFs saw net inflows totaling hundreds of millions in late October, indicating strong institutional confidence in crypto’s long-term potential.
Disclaimer: This article is educational content only and is not financial advice. Always consult a financial professional before trading or investing in cryptocurrencies.
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Disclosure: Authors may be crypto investors mentioned in this newsletter. Wolfy Wealth Crypto newsletter, does not represent an offer to trade securities or other financial instruments. Our analyses, information and investment strategies are for informational purposes only, in order to spread knowledge about the crypto market. Any investments in variable income may cause partial or total loss of the capital used. Therefore, the recipient of this newsletter should always develop their own analyses and investment strategies. In addition, any investment decisions should be based on the investor's risk profile
