On October 11, the crypto market experienced an unexpected, high-impact shock now known as Black Saturday.
In just a few hours, many tokens collapsed, large liquidations occurred across exchanges, and Bitcoin fell below $111,000, marking for the first time a daily candle at $20,000, which triggered panic across spot and derivatives markets.
But what caused this incident? And how did this affect the market? Did wе manage to recover? In this article, we will try to answer these questions.
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What was Black Saturday?
As we’ve already explained in our latest weekly crypto digest, a Black Saturday was a fast, deep market drawdown driven by a cluster of forced selling, leverage liquidations, and contagion across correlated tokens.
Within 24 hours, the value of leveraged positions decreased by over $19 billion, marking the most significant reduction in leverage in the history of the industry.
So, as a result, unlike slow corrections, this was an acute liquidity event: dozens of leveraged positions were closed automatically, amplifying downward pressure and driving price drops across major cryptocurrencies and altcoins.
Causes of the Black Saturday Crash
Market tension intensified late in the U.S. session after President Trump announced a proposed 100% tariff on imports from China, which instantly pushed markets into risk-off mode: equities, commodities, and crypto all sold off.
The collapse happened astonishingly fast: the steepest declines unfolded within roughly a 25-minute window, as high trader leverage collided with very thin order books. According to CoinDesk Reference Rates (CADLI), Bitcoin plunged to $106,560 at the low, Ethereum to $3,551, and Solana to $174; smaller-cap tokens dropped more than 75% intraday.
A combination of margin calls, automatic liquidations, and market-maker withdrawals amplified the downward spiral. With too few buyers, the seismic move quickly turned into a broad sell-off.
Market Impact: Token Price Drops, Bitcoin’s Fall, and Fear & Greed Index Plunge
As we’ve already mentioned, many altcoins posted steep intraday declines as liquidity evaporated, while BTC’s drop to around $20,000 concentrated headlines and trading activity.
ETH dropped to $3,700 and even lower. Many altcoins suffered double-digit losses, among the top ten by market value, XRP, Solana, and Dogecoin fared worst, each down by roughly 20%.
The Crypto Fear and Greed Index has dropped to 24, indicating a state of extreme fear in the market. As of now, it has rebounded to 33.
The stock market was the first to respond: the Nasdaq and S&P 500 indices dropped by 3.5% and 2.7%, respectively. This negative sentiment then spread to the world of cryptocurrencies.
Why Did Prices Recover Within a Week?
So far, different market analytics underline a few dynamics that explain this rapid recovery:
- Short covering and technical buying. Forced liquidations eventually exhausted selling pressure, and bargain hunters (including algorithmic market makers and spot buyers) stepped in. Short positions were covered, which amplified the rebound.
- Institutional and fund inflows. Some funds viewed the dip as an accumulation opportunity, deploying capital that stabilized prices. Recent weeks of positive flows into crypto funds made liquidity available to absorb the shock.
- On-chain resilience and stablecoins. Readily available stablecoin liquidity on-chain enabled quick re-entry into markets.
- Calmed news cycle. Once the immediate catalyst faded and no failures were reported, sentiment normalized.
Contrast this with an earlier major drop, where recovery took roughly a month, a longer rebound reflecting deeper macro uncertainty and slower capital redeployment.
In April, policy risk and broader macro headlines suppressed buyers for longer; in this Black Saturday’s case, the trigger was mostly market-structural and self-limiting, enabling faster mean reversion.
Final Thought
To sum it up, we can say that Black Saturday was a stark reminder that leverage, concentrated liquidity, and rapid sentiment swings can produce violent, short-lived crashes.
For traders and Web3 businesses alike, the lesson is clear: build for volatility – manage leverage exposure, and design products and infrastructure that can withstand or at least show you sudden market shocks in time.
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