October 2025 delivered crypto's largest liquidation event ($19B) followed by recovery following the trade deal resolution.

The cascade was exacerbated by illiquid collateral: wrapped assets like USDe, BNSOL, and WBETH—used widely as collateral for leveraged positions—depegged dramatically as forced liquidations hit thin order books, creating a self-reinforcing doom loop.

Markets repeated the April playbook: tariff shocks trigger ‘emotional’ overreactions creating buying opportunities. With Fed accommodation, ETF approvals ahead, and deleveraged market structure, BTC is likely to continue appreciating, provided institutional inflows continue.

Key Takeaways:

• October 10 liquidation ($19B) was 30x larger than April, exposing structural fragility in the digital assets markets
• Kuala Lumpur Trade Agreement (Oct 27) triggered V-shaped recovery: BTC was initially +10% to $112K
• Fed delivered 25bps cut on October 29th; December cut 70% probable, supporting risk assets
  
• USDe "depeg" was Binance infrastructure failure, not stablecoin mechanism failure—remained pegged on primary venue (Curve)
• For the full month of October, BTC outperformed Altcoins (-3.99% BTC vs -7.08% Altcoins) signaling falling risk appetite
  
• XRP ETF approval (99%+ odds) represent potential $5-10B institutional catalyst