The prices of Bitcoin and other cryptocurrencies continue to trade under the profound influence of the Flash Crash that occurred in October 2025. In the first week of November 2025, Bitcoin is trading around $107,000, and most Altcoins are seeing significant declines. Market analysts describe this phase as the ‘Hangover Phase.’
The October Shock: The Liquidation Event and Causes
The Liquidation Disaster
In the middle of October 2025, the crypto market witnessed an unprecedented liquidation event. In a short period, traders holding highly leveraged Long Positions faced losses of approximately $19 billion.
- What is Liquidation? Liquidation occurs when positions of traders using leverage (trading with borrowed funds) are automatically sold off as the market moves against them, resulting in the loss of their capital.
- Cause: The main reason for this disaster was the excessive leverage in the market and the execution of a Large Sell Order when trading volume was low. This triggered a Chain Reaction, causing billions of tokens to be automatically sold.
Other Contributing Factors
While the crash was intensified by liquidation, several macroeconomic factors had previously built up pressure:
- U.S. Employment Concerns: Fears regarding U.S. economic data and the expectation that Interest Rates would remain high for longer led investors to move away from risk assets like crypto.
- Banking Sector Warning: Key figures like former U.S. Treasury Secretary Scott Bessent warned of recession risks in housing and other sectors due to high interest rates, amplifying overall economic fear.
Why the Impact Persists into November
Even though the liquidation event is over, its psychological and structural impact continues to weigh down the market in November.
Rebuilding Capital
Traders who were liquidated will require a long time to recover their $19 billion loss and re-enter the market. Consequently, a persistent Lack of Buyers continues as new capital is hesitant to enter the market.
Reduced Institutional Interest
Following the liquidation shock, large Institutional Investors have temporarily withdrawn from the crypto market.
- Mining Slump: According to research from Gabriole Investments, institutional demand for Bitcoin has, for the first time in seven months, fallen below the rate at which new coins are being mined. This suggests fatigue and caution among long-term investors.
The Market’s ‘Hangover Phase’
Analysts describe the current situation as follows:
Jordi Alexander (CEO of Celini Capital): “The market is in a ‘Hangover Phase’ from the liquidation shock. The market must first show a Convincing Bottom before it can attempt a new rally.”
In this state, investors are waiting for a clear signal of market stabilization before making any major moves.
Altcoin Weakness
Smaller tokens, or Altcoins, have been affected much more severely than Bitcoin, with this year’s average decline surpassing 60%. During a Risk-Off sentiment, investors typically sell smaller and higher-risk Altcoins first, shifting to Bitcoin or exiting crypto entirely.
Social Media Trends and Market Sentiment
Discussions and fear surrounding the liquidation continue on social media and crypto forums.
- Shift from FOMO: The usual FOMO (Fear Of Missing Out) seen during price rallies has now turned into FUD (Fear, Uncertainty, Doubt). Traders are now fearful of how much further the market might decline, rather than rushing to buy.
- Leverage Awareness: Following the October event, many experts on X (Twitter) are spreading greater awareness about the dangers of leverage and the importance of Spot Trading (trading without borrowed funds).
A Look Ahead
The crypto market is currently at a crucial stage.
- Required Stability: Analysts are closely watching for Strong Support at levels between $105,000 and $100,000. If these levels hold, it will establish a baseline for the market.
- Ignoring Positive News: Despite some positive news in recent weeks, such as Nate Geraci’s prediction that XRP ETFs may launch soon, the market has not immediately reacted to these favorable developments due to the overpowering fear from the liquidation. This indicates how poor market sentiment is.
For the crypto market to resume an uptrend, factors such as the influx of new capital, renewed confidence from institutional investors, and the dissipation of liquidation fears are essential. The consensus among experts is that this ‘Hangover Phase’ may take several more weeks to fully clear.
