On October 17, 2025, the cryptocurrency market was gripped by a profound sense of dread. The Crypto Fear & Greed Index—a barometer of market sentiment—plummeted to 22 points, signaling a state of "extreme fear" not seen since April. The sharp drop, from a reading of 71 (Greed) just a week prior, left investors reeling and searching for answers. The index, calculated using factors like price volatility, trading volume, social media sentiment, and Google Trends, is often viewed as a psychological mirror for the market. When it falls below 25, as it did on this fateful day, it doesn't just reflect anxiety—it can also signal opportunity for the bold, or warn of further pain for the unwary.
But what exactly triggered this dramatic shift? According to OKX, a major catalyst was President Donald Trump’s announcement of sweeping 100% tariffs on all Chinese imports, set to begin November 1. Trump, in a fiery speech, accused China of "economic sabotage" and warned that tariffs could rise to 500% if China continued supporting Russia’s energy sector. The move, reportedly backed by more than 85 U.S. senators, sent shockwaves through global markets. Treasury Secretary Scott Bessent confirmed the broad political support and added fuel to the uncertainty.
The impact was immediate and severe. As detailed by Coinpedia, Bitcoin’s price nosedived below $106,000, skirting last Friday’s low of $104,000. Ethereum, too, suffered, dropping from $4,783 to $3,400 before staging a modest recovery. The Block reported that the broader crypto market followed suit, with major coins like BNB, XRP, and Solana all declining. The GMCI 30 index, which tracks the top 30 cryptocurrencies, fell by 2% in a single day.
The carnage wasn’t limited to digital assets. U.S. equities also closed mostly lower, hit by revelations of bad loans at regional banks such as Zions Bancorp and Western Alliance Bancorp. These banks were reportedly victims of fraudulent activities from the same borrowers, compounding the sense of instability. The negative mood in stocks spilled over into crypto, amplifying the sell-off.
Yet, the scale of the crypto fallout was breathtaking. OKX chronicled a liquidation event that saw over $19.33 billion in positions wiped out, with some estimates suggesting the true figure exceeded $30 billion. Long positions bore the brunt, accounting for $16.83 billion in losses, while short positions lost $2.49 billion. Bitcoin alone saw $5.38 billion liquidated, with Ethereum at $4.43 billion, Solana at $2.01 billion, and XRP at $708 million. In just three hours, the global crypto market cap shrank by over $1 trillion—a staggering 9% drop in 24 hours.
Why did this happen? The answer lies in the interplay of fear and leverage. When prices tumble, leveraged trades are forcibly closed, creating a cascade of selling that drives prices down even further. CoinGlass data highlighted that nearly $1 billion in leveraged trades were liquidated over 24 hours, impacting more than 260,000 traders worldwide. Most of these were long positions, which means traders betting on higher prices were forced to sell at a loss, accelerating the decline.
ETF outflows added yet another layer of pressure. On October 16, all major Bitcoin spot ETF issuers—including BlackRock, Grayscale, ARK Invest, and Fidelity—recorded outflows, totaling $531 million. Analysts cited by Coinpedia suggested that institutions were locking in profits and reducing exposure amid the rising geopolitical uncertainty. It was the first time all these giants saw outflows on the same day—a telling sign of institutional caution.
Despite the gloom, some analysts see glimmers of resilience. André Dragosch, PhD, Head of Research at Bitwise, argued that Bitcoin may prove more robust than traditional assets in this environment. "Remember we have already seen a significant capitulation in cryptoasset sentiment. It’s TradFi sentiment that’s doing the catch up to the downside here. That’s why Bitcoin will most likely stay relatively resilient during this turmoil. Bitcoin once again the canary in the macro coalmine," Dragosch told alternative.me. His comments echo a historical pattern: previous periods of extreme fear have sometimes marked market bottoms, followed by sharp rebounds. In April, for instance, a similar low in the Fear & Greed Index preceded a 70% surge in Bitcoin over six months.
On-chain data adds nuance to the picture. OKX reports that smaller Bitcoin holders (those with 1–1,000 BTC) have been accumulating during this period of fear, signaling confidence in Bitcoin’s long-term prospects. Conversely, miners have deposited 51,000 BTC to exchanges, suggesting potential sell-side pressure. This divergence underscores the complexity of market dynamics—while retail investors may be buying the dip, miners could be preparing to cash out.
Institutional investors, meanwhile, appear to be absorbing much of the excess supply, helping to stabilize Bitcoin’s price around $110,000. This support, even amid heightened volatility, hints at the growing role of institutions in shaping market direction.
But not all analysts are optimistic. Vincent Liu, CIO at Kronos Research, cautioned that "BTC and ETH have held up better than equities, yet thin liquidity and leverage mean any macro shock can still flip sentiment fast." Nick Ruck, LVRG Research Director, warned that a worst-case scenario could see Bitcoin fall below $100,000 if macroeconomic or foreign policy risks intensify. The market, he said, is showing "selective confidence, not full conviction." Presto Research’s Min Jung added, "For now, crypto prices will likely continue to react to developments related to the U.S.–China trade narrative, with both downside risks and potential upside catalysts tied to the news cycle."
Historically, October has been a strong month for Bitcoin, with average returns of 20.10%. But 2025 is breaking the mold. As of October 17, Bitcoin’s year-to-date gains are under 19%, making it the fourth-worst year since its inception, according to alternative.me. The much-hyped "Uptober" rally has so far failed to materialize, leaving investors to wonder whether the market is bottoming out or bracing for more pain.
Technical analysts are closely watching key support and resistance levels. For Bitcoin, support sits at $100,000 and $95,000, with resistance at $115,000 and $120,000. Ethereum finds support at $3,200 and resistance at $3,800. Breaching these levels could set the tone for the next phase—whether that’s a recovery or a deeper slide remains to be seen.
The current turmoil draws comparisons to previous market crashes, such as the COVID-19 crash in March 2020 and the FTX collapse in 2022. In both cases, the crypto market eventually rebounded after periods of intense fear, offering hope that history might repeat itself. As one investor on X calculated, there have been seven negative Bitcoin funding rates in the past two years, each followed by an average 22% gain within 15 days. "Historically, this has resulted in a market bottom and rally. Will it happen again?" asked analyst Ted.
For now, the crypto market is a cauldron of anxiety, uncertainty, and—perhaps—opportunity. Whether this period of extreme fear marks the start of a new bull cycle or simply another chapter in the market’s rollercoaster history will depend on how traders, institutions, and policymakers respond to the challenges ahead.
