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A sudden flash crash shook crypto markets on Oct. 10, wiping out billions in leveraged positions as Bitcoin, Ethereum, and other prominent tokens fell sharply before making partial recoveries.
Bitcoin dropped over 10% at its lowest point, reaching $101,500 before bouncing back to trade around $112,500 as of the latest update.
Ethereum also experienced a decline of more than 10% during the day before stabilizing above $3,800. Significant losses were observed in major altcoins, with Solana and Dogecoin plummeting more than 30% and 50%, respectively.
While Solana continues to trade below the critical $200 mark, DOGE saw a swift recovery and was trading above the $0.18 support level as of the latest update.
The downturn was initiated by a substantial sell order that triggered a chain reaction in futures markets, leading to widespread liquidations in an already vulnerable market environment following heightened geopolitical tensions between the US and China.
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This wave of forced selling intensified volatility, causing liquidity to diminish across major trading pairs. As of the latest update, over $7 billion had been liquidated across both long and short positions amid the erratic price movements.
The crash underscored the structural vulnerability of the crypto market, where high leverage and concentrated liquidity can exacerbate sudden price fluctuations. Bitcoin’s order books quickly thinned, resulting in a price drop before buyers intervened to absorb the decline.
Despite the recovery, traders remain wary. Bitcoin is facing crucial support around $110,000, while Ethereum needs to maintain the $3,800 to $4,000 range to avert further downward pressure.
Market participants are also monitoring open interest levels and whale activity for indications of renewed stability or additional strain. The incident was a sharp but potentially beneficial reset, eliminating excess leverage after months of speculative accumulation.
Nonetheless, the flash crash served as a reminder of how swiftly sentiment can shift in the digital asset market, where algorithmic trading and leverage can transform routine corrections into rapid, systemwide sell-offs.
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