Crypto Crash Today: Bitcoin and Ethereum prices fall as market loses over $100 Billion in 3 hours. Here's what led the price drop and analysts insights and predictions

In early October, Bitcoin had risen as investors looked for safe assets amid fears of a U.S. government shutdown. However, the market turned negative after recent political and economic developments.

Gold prices climbed past $4,200 per ounce, gaining over 16% in the past month. Analysts noted that capital has been moving toward gold due to lower volatility and stronger institutional support.

Sean Farrell, head of digital asset strategy at Fundstrat, told Yahoo Finance that investors might later rotate back to Bitcoin as gold’s momentum stabilizes. He said gold’s structural demand from central banks creates temporary pressure on crypto markets.

Crypto Crash Today Triggered by Liquidations and Derivatives

Crypto derivatives trading worsened the fall. According to strategist Ed Yardeni, the sudden price drop caused over $19 billion in liquidations across futures and leveraged positions.

When Bitcoin prices fell quickly, platforms automatically closed risky trades to limit losses. This caused a chain reaction of forced selling that intensified the decline.

Market data also showed that a large trader, known as a “whale,” shorted Bitcoin and gained $192 million ahead of the crash. The same wallet placed another bearish trade later that week, signaling continued negative sentiment.

Crypto Crash Today and Future Market Outlook

Despite the sharp correction, analysts expect Bitcoin to recover later this year. Historical trends show that October has been a strong month for crypto. Bitcoin has risen in 10 of the past 12 years during this period, according to Compass Point Research.

Last week, Bitcoin reached an all-time high above $126,000 before the decline. The rally was part of a broader “debasement trade,” where investors seek assets that hedge against weakening currencies.

Investment banks remain optimistic. JPMorgan predicts Bitcoin could rise to $165,000 by year-end, while Citi forecasts a price of $133,000 in the same period and $181,000 by the end of 2026.

Experts note that crypto markets are likely to remain volatile as global economic factors and leveraged trading continue to influence prices.

FAQs

What caused the crypto crash today?

The crypto crash today was caused by high volatility, leveraged liquidations, geopolitical tensions, and large bearish trades that triggered a market-wide selloff across major cryptocurrencies.

Will Bitcoin recover after the crypto crash today?

Analysts expect Bitcoin to rebound later this year. Historical data and bank forecasts suggest potential recovery, though market volatility and global risks may still influence prices.