The crypto market is still catching its breath after losing more than $19 billion in 24 hours. However, investors are likely getting ready for one more big swing based on how they are positioning their futures.
The event that started the chain reaction of forced sales was geopolitical. Specifically, President Trump's sudden call for a 100% tariff on Chinese imports and possible export controls on key software. This happened at a time when cash flow was low over the weekend.
Bitcoin's wild swing from an all-time high above $126,000 on October 6 to an hourly low near $104,783 showed how quickly leverage can mess up price discovery. Almost right away, the flow of options went defensive. Traders bought decline puts on bitcoin at $115,000 and $95,000 for the October 31 expiration. They then switched from buying to selling $125,000 calls for the October 17 expiration, which is a common way to protect yourself and be careful in the short term.
In these moments, education is important. People who are new to the market often join after the news highs and learn the hard way about volatility. Regional resources that collect early-stage project research in the local language can help investors tell the difference between momentum and fundamentals before sizing a position. For example, 99Bitcoins KR keeps a regularly updated hub on new coins and how to analyze them, which can help investors decide whether to hedge, hold, or avoid exposure altogether. The platform breaks down each coin's basics, helping both individual and institutional investors decide whether to hedge, hold, or avoid exposure altogether.
The tape was backed up by volatility measures. Deribit's DVOL index, which is crypto's most well-known 30-day implied volatility measure, went from being calm in late September to reaching multi-month highs as dealers re-priced gamma and vanna exposures into faster realized vol. In real life, this meant that premiums went up at the same time that demand for hedging did, causing managers to either pay more for protection or re-cut their gross exposure.
Under the chaos that was in the news, flows looked more complex. Willy Woo, an on-chain analyst, said that spot bitcoin inflows stayed strong, which helped BTC stay stable compared to high-beta altcoins.
On the other hand, ether and Solana saw bigger withdrawals. That doesn't mean complete surrender but shows that risk moved back toward crypto's "blue-chip" asset where swaps markets work best. That split is supported by the price activity in stocks like DOGE and AVAX, which had much bigger drops before partial recoveries.
In major markets, forced unwinds reached all-time highs as cross-margin accounts hit maintenance limits. This is a familiar mechanical feedback loop from previous crypto stress events. Only this time it was bigger because BTC's spot price base was at a record high. That's why the total amounts of liens paid hit a record high, even though the percentage changes felt smaller than in 2020 and 2022.
Even though markets partially recovered on Monday, thanks in part to the White House, traders remain positioned defensively long. Recent reports show that Trump's oldest sons have a $1.5 billion stake in a company that deals with Bitcoin. This shows that even families with political ties are investing in digital assets even though the prices are volatile. That balance of caution and dedication could mark the next step in crypto's recovery, with less debt, more money, and waiting measured in quarters instead of days.
This article was written in cooperation with BAZOOM