Cointime

Download App
iOS & Android

BTC, ETH, XRP, SOL Face Slow Bottoming Process After $16B Liquidation Shock

  • The crypto market experienced a significant crash, liquidating $16 billion in leveraged bullish bets across major cryptocurrencies.
  • These massive liquidations are likely to prolong the multi-step bottoming process, involving market makers arbing away price discrepancies.
  • All bets are off if the U.S.-China trade tensions continue to worsen.

The crypto market experienced its largest liquidation event ever on Friday night U.S. time, forcing out leveraged bullish bets worth $16 billion across bitcoin,  ether , solana , and the broader altcoin market. Several altcoins have crashed between 20% to 40% as the market recoiled.

Naturally, bulls may be wondering whether the recovery could be swift or take time. Understanding the process that follows a crash like this suggests the recovery is likely to be gradual, testing the patience of bullish investors.

"When the market turns like this, there’s usually a pretty straightforward playbook for the aftermath," Zaheer Ebtikar, chief investment officer and founder of Split Capital, said on X.

Here's what a typical sequence looks like:

Market bleeds and market makers pause

The initial phase involves the market "bleeding out" or tanking deeper as liquidation orders flood exchanges, pushing prices lower. We saw that happen overnight as several altcoins, including XRP, DOGE, and others, crashed to multi-month lows.

Amid this, market makers, the entities responsible for providing liquidity and ensuring orderly trading, usually step back temporarily to manage their risk and focus on "refilling by first taking out big spot and perp abrs on assets," as Ebtikar noted.

It means they address price mismatches between spot and futures markets with arbitrage plays involving opposing positions in the two markets. This process prevents an immediate rebound.

Data feeds stabilize

This phase refers to the period after a market crash, when information channels that traders and market makers rely on begin to work reliably again. During the crash, exchanges and the tech systems providing real-time updates, order book data, and order executions often see delays or outages due to high volatility.

Once the data feed stabilizes, market makers and large traders start absorbing major sell orders to restore market equilibrium. These participants capitalize on liquidation orders, which receive priority in order books and facilitate bargain hunting.

Given the sheer size of the forced liquidations observed overnight, this absorption phase can span several days.

Market stabilization

This stage involves dealers and market makers closing out their long positions, which they initially acquired at bargain prices while absorbing liquidation orders, to profit from a potential rebound.

"Once dealers fill long they will start unwinding spot and perp when the market is back to equilibrium. This is when the market hits a local maxima and the Dalai Lama chart starts hitting. Some assets that have tighter supply will look better than others," Ebtikar said.

This process is usually slow, especially over the weekend when the spot ETF's don't operate, reducing the overall market liquidity. This lower liquidity makes it harder and slower for dealers to unwind large positions without causing big price moves, so unwinding tends to slow down during these periods.

Market finds a floor

Eventually, the market finds a floor, settling into a more stable range, and investor confidence dented by the crash begins to rebuild.

To conclude, the large liquidations observed overnight will likely prolong the multi-step bottoming process, involving strategic buying of liquidation orders by market makers, liquidity challenges over the weekend, and new price anchoring.

All this being said, if the headline risk — continued U.S. - China trade tensions — doesn't subside, all bets are off as to when this will end.

Comments

All Comments

Recommended for you

  • Spot Silver Rises 5%

    On November 4, spot silver surged 5.00% during the day, currently priced at $52.29 per ounce.

  • Economists: Strong Start for U.S. Economy in Q4, GDP Growth Rate May Exceed 4%

    On November 4, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "The October PMI survey indicates a strong start for the U.S. economy in the fourth quarter, with the GDP annualized growth rate potentially exceeding 4%. The technology sector remains a key highlight of economic growth, but encouragingly, consumer-facing industries and financial services are also performing robustly. However, the positive news on economic growth is offset by renewed concerns over inflationary pressures and the poor performance of some forward-looking survey indicators. Although current output continues to show strong growth, the pace of expansion has slowed from recent peaks, which is related to a deceleration in new orders and a decline in business confidence regarding the economic outlook. In October, large service sector companies significantly reduced their optimism for the future, reflecting concerns about consumer affordability, interest rates, and political uncertainty. Meanwhile, the average sales price in the service sector has seen one of the fastest increases in the past four years. Combined with the significant rise in goods prices indicated by the October manufacturing PMI survey, the overall signal suggests that inflation rates may rise further above the Federal Reserve's target level in the coming months.

  • Apple's Ge Yue: AI Will Not Replace Apps, But Will Drive Further Development of Application Ecosystem

    At the 2026 World Internet Conference Wuzhen Summit's Forum on Intelligent Technology Innovation and Governance, Ge Yue, Vice President and Managing Director for Greater China at Apple, stated that artificial intelligence is accelerating changes in application development models. However, AI will not replace apps; instead, it will enhance the next generation of apps, making them more powerful and personalized, and turning them into indispensable tools in people's lives.

  • Dow and Nasdaq Rise Over 2%

    On November 4, the three major U.S. stock indices further expanded their gains, with the Dow and Nasdaq rising over 2%, and the S&P 500 increasing by 1.7%. Among large tech stocks, Amazon rose over 7%, Apple increased by over 5%, Google gained over 3%, Meta rose by over 1%, while Nvidia fell by 0.65%, Intel dropped by 1.6%, and Tesla declined by over 4%.

  • Security Incident at Israeli Presidential Office

    Market news: A security incident has occurred at the Israeli presidential office.

  • BTC Surpasses $79,000

    Market data shows that BTC has surpassed $79,000, currently priced at $79,018.84, with a 24-hour increase of 2.17%. The market is experiencing significant volatility, so please ensure proper risk management.

  • Blue Wave in US Midterm Elections Boosts Stock Market

    On November 4, US stocks opened higher, with the Dow Jones rising by 1.9%, the S&P 500 increasing by 1.1%, and the Nasdaq up by 1.07%. The Democratic Party performed better than expected in the US midterm elections, leading to strong gains in clean energy and healthcare stocks. FTC Solar (FTCI.O) surged by 40%, First Solar (FSLR) rose by 13%, Gilead Sciences (GILD.O) increased by 2%, and Moderna (MRNA.O) was up by 3%. In contrast, stocks related to Elon Musk and Donald Trump weakened, with Trump Media & Technology Group (DJT.O) down by 9.8%, SpaceX (SPCX.O) falling by 5%, and Tesla (TSLA.O) declining by 4%.

  • TAO Surpasses $230

    Market data shows that TAO has surpassed $230, currently priced at $230.1, with a 24-hour increase of 1.28%. The market is experiencing significant fluctuations, so please ensure proper risk management.

  • Blue Wave in U.S. Midterm Elections Boosts Stock Market

    On November 4, U.S. stocks opened higher, with the Dow Jones rising by 1.9%, the S&P 500 increasing by 1.1%, and the Nasdaq up by 1.07%. The Democratic Party performed better than expected in the U.S. midterm elections, leading to strong gains in clean energy and healthcare stocks. FTC Solar (FTCI.O) surged by 40%, First Solar (FSLR) rose by 13%, Gilead Sciences (GILD.O) increased by 2%, and Moderna (MRNA.O) gained 3%. Stocks related to Elon Musk and Donald Trump weakened, with Trump Media & Technology Group (DJT.O) falling by 9.8%, SpaceX (SPCX.O) down by 5%, and Tesla (TSLA.O) declining by 4%.

  • UAE Considers Building Third Crude Oil Pipeline to Bypass Strait of Hormuz

    The UAE is considering the construction of a third crude oil pipeline to bypass the Strait of Hormuz.