October reached a historical high → Tariff/export control news → Leveraged liquidations ( >190 billion USD) → Yearly line turns down (first time since 2022).
Statement: This article is for information and risk education only and does not constitute investment advice.
5 points summary
The yearly line for Bitcoin turns down in 2025, widely interpreted as 'BTC being more like a macro risk asset' rather than an independent market.
In the year, BTC surged to a historical high of >126,000 USD in October, but subsequently experienced a significant pullback.
Around October 10-11, the market triggered a 'forced liquidation waterfall' under low liquidity, with cumulative liquidations >190 billion USD, setting a historical record.
One direct trigger is the impact of macro policies such as tariffs and export controls, with market sentiment switching from 'optimistic' to 'panic' within hours.
This is not about 'a specific project blowing up', but rather a structural chain reaction occurring under pressure from leverage + liquidity + exchange risk control rules.
1. Event Timeline: From 'Peak' to 'Yearly Line Turning Down'
1) Early October: reached an all-time high (market in a 'tailwind situation').
Reuters reported BTC approached/refresh historical highs in early October, with price peaks in the $125,000–$126,000 range.
Typical market state at that time.
'Bullish consensus' is strong: trend traders and momentum funds are more willing to leverage.
Derivatives are more active: perpetual contracts and options trading volumes are rising, making the market structure more fragile.
Once 'headwind news' emerges, volatility will be amplified by leverage.
2) October 10-11: macro news lands → the largest liquidation waterfall in history (>$19 billion).
Multiple Reuters reports linked this crash to policy statements on tariffs/export controls, leading to over $19 billion in liquidations, referred to as 'the largest forced liquidation in crypto history'.
Industry research also emphasizes that the essence of this event is 'leverage meeting liquidity': when prices break through key position ranges, forced liquidations trigger further sell-offs, causing nonlinear declines.
At the same time, CoinShares' analysis mentioned that during this period BTC once dipped to around $104,782, illustrating the typical risk of 'rapid pullback after peaking'.
3) Year-end: yearly line turning down (first time since 2022).
A Reuters report dated 2025-12-31 points out that BTC is expected to record over 6% annual decline in 2025, attributing it to macro trends and 'increased correlation with risk assets'.
2. Why can 'new highs' still lead to 'yearly line turning down'? — The key is: BTC's pricing logic has changed.
The core change in 2025: BTC resembles 'a part of global risk assets'. Reuters explicitly mentioned that Bitcoin's trend increasingly resembles US stocks and other risk assets, influenced more by macro and geopolitical factors.
Past BTC resembled 'internal crypto cycles': halving, on-chain narratives, exchange and project events.
Today's BTC resembles 'macro Beta': interest rate expectations, US dollar liquidity, tariffs/trade conflicts, risk appetite.
When the market is in a 'fragile state' (high leverage, thin liquidity, concentrated positions), a macro thunder will break through the structure.
3. What does the >$19 billion liquidation actually mean?
Many have heard of 'liquidation', but not truly understood 'why does the waterfall happen'. This can be clarified using a three-part chain:
Part 1: Leverage transforms 'normal pullbacks' into 'forced selling'.
In perpetual contracts, positions have maintenance margin requirements.
When prices drop near certain 'forced liquidation lines', exchanges will enforce liquidations (equivalent to market sell orders).
Once concentrated forced liquidations occur, selling pressure instantly becomes 'automated and mechanical', accelerating the market decline.
Part 2: Liquidity thins, leading to 'the more you sell, the more it falls'.
FTI Consulting's analysis highlights that under pressure, liquidity and trading venue design amplify volatility — when the order book thins, forced sell orders can directly pierce through multiple levels.
Part 3: Chain triggers form a 'self-fulfilling collapse'.
Price drops → triggers more forced liquidations → increased selling pressure → lower prices.
This is the positive feedback loop of 'forced liquidation waterfalls'.
CoinShares also linked this >$19 billion liquidation to tariff news and increased volatility, providing key details on price dips.
4. What this event teaches us: 6 hardcore lessons for 2026.
1) Treat BTC as 'a macro risk asset'.
When encountering macro shocks (tariffs/trade, interest rates, US dollar strengthening/weakening), BTC's volatility may resemble that of high Beta stocks.
2) 'Leveraging' does not increase returns; it increases bankruptcy probability.
Leverage increases tail risk exposure. October's event is a textbook case.
3) Low liquidity periods are the most dangerous.
During weekends, holidays, and Asian/European transitions, the order book is thinner, making forced liquidations easier to 'pierce the price'.
4) Focus on 'position structure' is more important than focusing on 'headline news'.
Is open interest (OI) at a high level?
Is the funding rate continuously positively skewed (longs crowded)?
Is options implied volatility (IV) being pressed to extremely low levels (calmness can be dangerous)?
Are exchange/on-chain liquidation hot zones concentrated?
5) Learn 'layered positions + plans', don't rely on on-the-spot reactions.
Long-term spot positions: manage independently to avoid being affected by short-term leverage.
Trading positions: clear stop-loss/reduction rules, reduce leverage in the face of 'structural risks'.
6) The most important point: you must assume 'a forced liquidation waterfall will come again'.
Market structure dictates: as long as there is leverage, waterfalls will appear periodically; the difference is only in scale and triggers.