Textbook-like rebound! The crypto market bounces back, Bitcoin breaks through $115,000, analysts say the big dump is a "geopolitical overreaction".

The cryptocurrency market is strongly recovering from the historic selling losses triggered by US President Trump's tariff threats last Friday. Previously, within just seven hours, Bitcoin plummeted from $121,000 to $109,000, erasing all gains from the early part of "Optimistic October" (Uptober). CoinGlass data shows that last Friday, the total market liquidation reached nearly 20 billion USD, with 16.7 billion USD being long positions, setting a record for the "largest single-day liquidation in cryptocurrency history." However, with signs of easing tensions between China and the US, the market quickly welcomed a "textbook-style relief rebound": Bitcoin rose 5% to $115,100, Ethereum soared 10.5% to $4,138, and major altcoins saw even greater increases.

Flash Crash Review: The Largest Liquidation in History Triggered by Geopolitics

· Historic Losses: Last Friday's trading session was extremely volatile, with Bitcoin falling to $109,000 in seven hours and Ethereum dropping to $3,686. Sean Dawson, the research director of the on-chain options platform Dervie, described the event as a "liquidation flash crash", which wiped out nearly 7 billion dollars in just one hour, with 5.5 billion dollars being long positions. Ultimately, CoinGlass data confirmed that the total liquidation amount for the day was close to 20 billion dollars, marking "the largest single-day liquidation in Crypto Assets history."

· Macro Trigger: The trigger for this dual slaughter of stocks and cryptocurrencies (Nasdaq fell 3.6%, S&P 500 index fell 2.7%) is the announcement by U.S. President Trump to cancel the meeting with Chinese President Xi Jinping and order a "massive increase" in tariffs on imported goods from China. This move aims to respond to Beijing's actions to restrict the export of rare earths and key minerals.

Strong Market Rebound: Mean Reversion After Geopolitical "Knee-Jerk Reaction"

· Analysts Qualify as "Relief Rebound": Crypto investment manager Merkle Tree Capital CEO Dean Serroni stated that the market is currently experiencing a "textbook relief rebound"**. He believes that last Friday's big dump was the market's "knee-jerk reaction" to geopolitical bombs, rather than "structural damage."

· Ethereum leads the rise: Serroni pointed out that the 11% rise of Ethereum is a "pure short covering and mean reversion", occurring after the market overreacted to Trump's tariff news.

· Deleveraging completed, selling pressure thinned: After experiencing a peak of **"over-leveraged traders" volatility and a reset of open contracts in the derivatives market, Serroni observed that "selling pressure has become very thin".

· Assets have fully rebounded: As of now, major digital assets have significantly rebounded:

· Bitcoin (BTC): Intraday rise of 5% to $115,100.

· Ethereum (ETH): intraday rise of 10.5% to $4,138.

· Alts: Major alts such as Solana, BNB, and Dogecoin are experiencing strong rises, with respective increases of 12%, 16.5%, and 11.4%.

· China's position softens to boost: The rapid shift in market sentiment is partly attributed to the signs over the weekend that China's position seems to have softened, leading analysts to believe that the initial market big dump may have been influenced by a temporary geopolitical overreaction.

Conclusion

The rapid rebound of the crypto market strongly proves that this big dump was triggered by external macro events, characterized as a "washout" and "deleveraging" behavior, rather than a structural end of the bull market. Although the market has been highly volatile in the short term, with liquidation amounts reaching historical highs, the strong return of buying pressure and the quick evaporation of selling pressure indicate that the market is digesting macro risks at a rapid pace. In the upcoming trading sessions, investors will continue to pay attention to the progress of US-China trade negotiations to determine whether this strong recovery momentum can be sustained and push prices back to historical high zones.

Disclaimer: This article is for news information only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make decisions with caution.