After nearly a $19 billion wipeout, the Bitcoin and crypto market has clawed back but volatility is signaling more turbulence ahead, according to an update from Derive.xyz. The team noted that they witnessed an unprecedented market meltdown on Friday (October 10, 2025), with more than $19 billion in liquidations across the crypto-assets ecosystem.
This activity has been attributed to panic as well as thin liquidity. Notably, BTC, ETH and SOL saw flash crashes of “-12%, -20% and -24.6% respectively, before stabilising.”
Altcoins were hit even harder “as HYPE (-54%), DOGE (-62%), and AVAX (-70%) all suffered catastrophic drawdowns before recovering to more modest losses.”
The update from Derive.xyz added that the crash was “triggered by renewed fears of a U.S.-China trade war, after Donald Trump threatened an additional 100% tariff on Chinese imports.”
This came on the heels of China announcing new “restrictions on rare earth element exports, escalating tensions between the two economies.”
The market update added:
“Trump’s tariff remarks immediately sent shockwaves through global markets. Liquidity evaporated across crypto futures as market makers pulled quotes to avoid breaching risk limits. With order books thinned out, forced liquidations and panic selling had an outsized impact on price, fueling a self-reinforcing cascade of liquidations and accelerating the flash crash.”
The report also mentioned:
“Volatility spiked sharply across BTC and ETH markets. Typically, sharp selloffs only lift short-dated volatility (1-7 DTE) as traders expect near-term turbulence to subside. However, Friday’s downturn drove elevated volatility across all expiries, signaling expectations of sustained turbulence and a choppy road ahead.”
On the day of the crash, options skew “dropped sharply for both BTC and ETH, reflecting a rush into downside protection.”
Skew measures the relative demand “for calls versus puts; a more negative value indicates higher demand for puts.”
In BTC options, Derive.xyz said they saw “heavy buying of $115K and $95K puts for the October 31 expiry, alongside a sharp reversal from call buying to call selling at the $125K strike (October 17 expiry), signaling a bearish near-term outlook.”
For ETH, traders focused “on the October 31 $4K and October 17 $3.6K strikes, while substantial buying of $2.6K puts for December 26 expiry reflected growing bearish sentiment through year-end.”
As covered, Derive.xyz (TVL $115.8M, $18.6B trade volume). is the decentralized protocol that creates “programmable onchain options, perpetuals, and structured products.”
