By Frank Holmes.

Four months ago, digital assets underwent what I believe was the most consequential liquidation event in their history. On October 10, 2025, over $19 billion in leveraged positions were wiped out within hours. Bitcoin plummeted from roughly $122,000 to $105,000. More than 1.6 million trader accounts were liquidated.

The 10/10 crypto crash, as it’s sometimes called, did more than just rattle the market. It fundamentally altered the psychological landscape of crypto investing.

As I told PreMarket Prep last week, from a technical standpoint, Bitcoin is now roughly two standard deviations below its 20-day trading norm. This is a level we’ve seen only three times in the past five years. Historically, such extremes have favored short-term bounces over the subsequent 20 trading days.

The Japanese carry trade unwind—estimated at around $500 billion—likely exacerbated the weakness we saw in January and this month, but I believe that pressure is largely behind us now.

Now, with Bitcoin still trading under $70,000—down 45% from its all-time high some investors might be wondering if October 10 is the reason this weakness has persisted.

The short answer is yes. But the full story is more nuanced and, I think, more important for your portfolio decisions going forward.

What Actually Happened
To put things in perspective, the 10/10 crash was larger than the FTX meltdown in absolute dollar terms. Think about that. It dwarfed the collapse of what was then the second-largest crypto exchange. Binance alone had to tap its insurance fund for $188 million to cover bad debt. Several other exchanges faced similar pressures.