Bitcoin’s sharp weekend plunge did more than reset price charts. After what multiple data trackers called the largest single day crypto liquidation on record, totaling roughly $19 billion in forced unwinds, options desks reported a burst of demand for puts on bitcoin and ether as traders moved to insure against another leg down.
A new round of tariff targeting Chinese imports ricocheted through risk assets, and an already leveraged crypto market broke first.
Bitcoin briefly slid near $105,000 before recovering part of the drop. Ether fell as well, and the altcoin complex took the brunt of the damage after an altcoin rally heats up stretch in early September.
Deribit’s analytics show short-tenor implied volatility snapping higher, with 7 day gauges for ether climbing more than ten volatility points from early October lows.
Skew turned more defensive in the front of the curve as demand for puts outpaced calls that pattern is consistent with the message from perpetuals funding and basis, the market de-risked, then stayed cautious rather than immediately re-risking.
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Blockchain sleuthing tied to public exchange data flagged a well watched wallet that added hundreds of millions of dollars in fresh bitcoin short exposure on a crypto-native derivatives venue days after the crash.
The same wallet was widely reported to have profited on pre-crash bearish bets. Those details remain under scrutiny, but the direction is not in doubt: some whales leaned harder into downside, amplifying chatter about a “crypto crash 2.0.”
Persistent institutional interest, visible in custody growth and corporate balance sheets, continues to act as a shock absorber.
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Earlier this fall, Strategy expands bitcoin trove, while Tether quietly grabs 8,888 bitcoin to bulk up reserves. On the market-structure side, options have become a bigger swing factor for spot, as the growing size of listed contracts funnels hedging flows back into underlying prices.
Regulatory and market plumbing are part of the near-term picture too. In late September, an SEC move prompts pullback in several altcoin-linked products cooled risk appetite beyond bitcoin and ether.
The exchange landscape continues to institutionalize, from listings to capital markets ties such as Nasdaq doubles down on crypto and the broader exchange narrative around Gemini goes public on Nasdaq.
A deeper options market can cushion turbulence by spreading risk, but it can also transmit stress quickly when dealers hedge aggressively into thin spot books.
A $19 billion purge in a day does wipe out a wide swath of weak leverage, but it does not guarantee a durable floor if catalysts persist.
