What was the October 2025 flash crash that preceded the current decline in Bitcoin interest, and how did it impact marke

The October 2025 flash crash was a brutal day of forced selling that wiped out billions in crypto value, shattered confidence, and kicked off months of fear and falling prices. Here’s the breakdown of what happened and how it changed sentiment.

What was the October 2025 flash crash?

The crash hit on October 10, 2025 [2][6][11]. It was triggered when President Trump announced 100% tariffs on China, sparking a panic that snowballed because of extreme leverage in the crypto market [12][8][10]. By mid‑2025 crypto lending had already ballooned beyond $53 billion [7], and when prices started to slide, margin calls forced investors to sell – which pushed prices down even more, creating a cascading effect [10].

In roughly a single day, more than $19 billion worth of leveraged positions were liquidated [1][3][15]. That made it the largest mass liquidation event in crypto history [3]. The total cryptocurrency market lost $1.1 trillion in market cap [13], and about 1.64 million traders were wiped out (liquidated) [16].

Bitcoin itself was hammered:

• It dropped $12,000 during the crash [2].
• From an early‑October high around $122,000–$126,000 [24][25], it fell to about $104,783 in the Oct 10‑11 window [24].
• Within a month it had lost roughly 25% [14].
• Later it tumbled 50% from its October peak, eventually hitting six‑month lows near $43,328 and $38,258 [19][20].

Altcoins suffered even more, with many crashing 50–75% [29][21]. The whole thing was repeatedly described as a systemic liquidation that “really nuked the markets” [17].

How did it impact market sentiment?

Sentiment nosedived immediately. The Crypto Fear & Greed Index cratered to 9 out of 100—its lowest level since June 2022—signalling “extreme fear” [26]. Overall crypto sentiment slumped to its lowest point in over three and a half years [27]. Many were convinced the pain wasn’t over: one analyst summed up the mood with “I don’t think we are over – more pain is coming” [18].

That dark mood lingered for months. The market stayed in fear territory for so long that it wasn’t until much later we saw the Fear & Greed Index finally flip back to “greed” for the first time since the October liquidation crash [22][23].

The crash also bred institutional anxiety: after the event, concerns intensified that MSCI would drop companies holding crypto treasuries, adding another layer of fear [28][5][9].

Fast forward to June 2026, and Bitcoin was still struggling. Its realized price had fallen to around $53,000, with expectations of a further drop into the mid‑$40,000s [32]. Analysts openly questioned whether Bitcoin had even bottomed out yet [31]. This prolonged price decay and the deeply shaken confidence are a big part of why interest in Bitcoin eventually waned – the flash crash wasn’t just a one‑day scare, it set off a long, bruising hangover.