October 10 marked the crypto market’s largest-ever liquidation event. A brutal cascade erased over $19 billion in leveraged positions, wiping out $450 billion in total market value and triggering a wave of panic-selling that sent shockwaves across exchanges.

In the aftermath, many analysts are now arguing this massive deleveraging has finally exhausted sellers, possibly creating a market bottom. This view is supported by the Crypto Fear & Greed Index, which plunged to a yearly low of 22 on October 17, a reading of “Extreme Fear” not seen since the market lows of April.

Instead of a bearish signal, some analysts see this capitulation as a powerful contrarian opportunity. Analysts at Bitwise noted the event marked a powerful buy signal, arguing that forced liquidations have meaningfully depleted selling pressure. This record volatility put the infrastructure of major exchanges to the test causing glitches leading to some users losing money.

Binance CEO Richard Teng posted on X shorter after the event, “The last 24 hours have been turbulent for the crypto market, and I know many of you faced challenges on our platform. I’m truly sorry to everyone who was impacted. We don’t make excuses — we listen closely, learn from what happened, and are committed to doing better. If you’re still experiencing any unresolved issues, please reach out to our Binance Support team. Every case will be handled with the care and attention it deserves, and compensation will be provided where applicable. Volatility is part of the market, and we encourage all users to stay informed and take care during these times. Thanks for sticking with us always.”

Crypto Fear & Greed Index Drops to 22

The market sentiment shift is stark. The Crypto Fear & Greed Index’s fall to 22 is its lowest reading in 2025, a level historically associated with investor capitulation and prime entry points. This reading is directly linked to the unprecedented futures market flush on October 10, when Bitcoin’s perpetual futures open interest saw a record decline of nearly $11 billion. The sudden drop was intensified by a wave of auto-liquidations, where exchanges automatically close positions that fail to meet margin requirements.

This massive deleveraging has critical implications. Bitwise’s analysis noted their proprietary “Cryptoasset Sentiment Index” also hit its lowest point since the “Yen Carry Trade Unwind” of August 2024. This triggered what they call a “clean contrarian buying signal,” suggesting that selling pressure has been significantly exhausted.

This short-term panic contrasts sharply with the market’s underlying strength in 2025. The short-term turmoil masks the impressive year-to-date (August 25 data) performance of major digital assets. A Binance Research report shows ETH up 36% and BTC up 18% this year. These returns beat traditional benchmarks like the S&P 500 (10%) and the Nasdaq Composite (11%)—it’s this kind of resilience that keeps long-term investors interested.

A Market Bottom Ahead?

The market’s focus has shifted to Bitcoin’s price action around the critical $110,000 support level. As of October 20, BTC is trading near $111,000 after repeatedly testing sub−$111,000 levels, which traders now see as a key demand zone. Some traders are viewing this as a moment to “lock in” positions after the area withstood four separate tests. The recent dip also filled a key CME futures gap between $109,680 and $111,310, a technical event that often precedes a clearer directional move.

This thesis is supported by on-chain evidence. Glassnode data reveals that smaller- to mid-sized entities, holding between 1 and 1,000 BTC, have engaged in “strong accumulation” following the dip. This activity signals renewed confidence among retail and mid-tier investors who are stepping in to buy at discounted prices.

The activity of larger players also tells a complex story. Long-term holders sold off 265,715 BTC over the past month—the largest monthly outflow since January 2025—but the most recent data shows these large whale holders have slowed their distribution, absorbing some of the selling pressure. Concurrently, miners exerted pressure by depositing 51,000 BTC to exchanges since October 9, moves typically made to sell or hedge positions. However, this supply appears to be fully absorbed by re-emerging dip-buyers.

From Panic to Pivot: A Market Reset

The historic $19 billion liquidation cascade on October 10 triggered extreme fear, but on-chain data and analyst commentary suggest it may have been a pivotal market reset. A yearly low on the Fear & Greed Index, the exhaustion of selling pressure after a record futures flush, and renewed accumulation from smaller investors at the critical $110,000 BTC support level all point toward a bottoming process. The event was a flush-out of speculative leverage, not a crisis of fundamental conviction.

Macroeconomic uncertainties remain. However, the market’s ability to absorb such a massive wave of forced selling points to deep and structural demand. This resilience is laying the groundwork for a potential Q4 recovery. Strategic buyers are now stepping in to absorb what panicked sellers are leaving behind. The strong year-to-date numbers from ETH and BTC provide a fundamental backdrop of strength, suggesting this wasn’t the start of a bear market but a sharp—and perhaps necessary—correction.