Bitcoin and Ethereum Rebound: Recovering from Crypto's Largest Single-Day Wipeout in October 2025

In the volatile crypto markets of October 2025, Bitcoin and Ethereum staged a robust rebound over the weekend, clawing back losses from Friday's historic $20 billion liquidation event—the largest single-day wipeout in crypto history. Triggered by escalating U.S.-China trade tensions, the plunge saw BTC drop 10% from $121,000 to $109,000 and ETH fall 11% to $3,686 in just seven hours, dragging altcoins like Solana to $173 lows. By Sunday, BTC climbed 5% to $115,100 and ETH surged 10.5% to $4,138, with SOL up 12% and BNB gaining 16.5%, per CoinGecko data. This relief rally highlights crypto's resilience amid global shocks, blending geopolitical overreactions with DeFi's maturing infrastructure.

The Wipeout: Trade War Sparks $20B Liquidation Avalanche

The carnage unfolded on October 10 when President Trump announced a "massive increase" in tariffs on Chinese imports—potentially 100%—canceling a planned Xi summit and citing Beijing's rare earth export curbs as retaliation. This ignited a risk-off frenzy, syncing with U.S. stock slides: Nasdaq down 3.6%, S&P 500 off 2.7%, and Dow breaching 40,000. Crypto amplified the pain via overleveraged perps: $7 billion vanished in one hour, including $5.5 billion from longs, pushing total daily liquidations to $20 billion—$16.7 billion from longs alone, per CoinGlass. Derivatives reset open interest amid volatility spikes, purging weak hands in a flash crash that echoed 2022's leverage crises but on steroids.

• BTC Plunge: $121K high to $109K low; 10% drop in hours.
• ETH Carnage: To $3,686; 11% wipe amid $5B perps losses.
• Altcoin Echo: SOL -12%, DOGE -11.4%; $20B total across assets.
• Global Tie: Nasdaq correlation; oil/copper dips on supply fears.

Expert Takes: Relief Rally or Mean Reversion?

Analysts hail the rebound as "textbook relief," driven by short-covering and overreaction unwind. Sean Dawson of Dervie called it "the largest single-day wipeout," noting $7B hourly liquidations. Dean Serroni of Merkle Tree Capital attributed ETH's 10.5% pop to "pure short-covering and mean reversion after the market overreacted to Trump’s tariff bombshell," with thin selling post-reset. Serroni downplayed long-term damage: "This rout was a geopolitical knee-jerk, not a structural break." China's softened rare earth stance on October 12 fueled the snapback, signaling stabilization.

• Short Squeeze: Funding rates flipped negative; OI reset aids recovery.
• Overreaction Factor: Tariff fears eased; institutional bids returned.
• KOL Echo: "Uptober intact"—@AltcoinSherpa on X.

Outlook: Volatility Lingers, but Resilience Shines

Short-term, expect continued mean reversion with BTC eyeing $119K and ETH $4,300, but U.S.-China talks could reignite swings. Fundamentals hold: ETH staking at 4.2% APY and BTC's scarcity buffer shocks. For traders, batch dips with 5% stops on compliant DEXs like Uniswap; favor spot over perps.

• Targets: BTC $119K; ETH $4.3K on $4K hold.
• Risks: Shutdown extension; tariff deadlines.
• Opportunity: Post-purge inflows; DeFi TVL rebound +20%.

In summary, BTC and ETH's rebound from crypto's $20B wipeout—fueled by trade war jitters—affirms market maturity. Secure via multi-sig wallets, monitor geopolitics, and ladder buys—explore CoinGlass for liquidation maps in this resilient rally.