Market Reset After the $20 Billion Liquidation Shock: What is the Next Move for Bitcoin and Ethereum?

After the "100% tariff" shock wave from President Trump triggered a market high leverage and led to a historic liquidation wave in the crypto market, Bitcoin has rebounded to above $115,000, but market sentiment remains weak. Analysis shows that the current rebound resembles a reflexive repair rather than a convincing buy-in. Among major crypto assets, the trend recovery of Bitcoin has "opened up," but momentum is lacking; Ether's recovery appears the weakest; while Solana is caught in a conflict between short-term turbulence and a long-term bullish structure. Overall, the market has undergone a "purifying reset" after brutal liquidations, and is expected to consolidate in the range of $110,000 to $125,000 until a true macro or crypto-native catalyst emerges to determine the next phase.

Epic Liquidation Triggered by Political Shock: The Brutal Purification of the Market

Last Friday, a piece of macro-political news sparked the high leverage in the crypto market, leading to an astonishing scale of forced liquidations, but it also brought about a structural "purification" for the market.

· Macro Catalyst: This market turmoil is not caused by native encryption events, but triggered by political news. On Friday, October 10, Trump announced on Truth Social plans to impose a 100% tariff on all Chinese imports starting November 1.

· Leverage Meat Grinder: This news has triggered severe fluctuations in the global risk asset market, with the crypto market being the first to bear the brunt, caught in the "leverage meat grinder." Bitcoin's price briefly fell below 102,000 USD, while Ethereum slid below 3,800 USD.

· Unprecedented liquidation scale: This wave of liquidations is unprecedented, widely clearing a large number of over-leveraged long positions and sweeping away the previous sentiment of "one-sided rise." Although a few short sellers accurately seized this opportunity for the crash, the more important impact lies in the rapid reset of the position structure — after the forced sell-offs were cleared, the market quickly returned. This is also the paradox of the crypto market crash: after the brutality comes purification.

Bitcoin Trend: Structure Bullish but Momentum Lacking, Stuck in Range Oscillation

After experiencing significant volatility over the weekend, Bitcoin has successfully rebounded, but it lacks strong internal momentum, indicating that it will primarily experience range-bound fluctuations in the short term.

· Price and support: Bitcoin has rebounded from its low point and has regained the 115,000 USD level, while holding above the support of the 200-day exponential moving average (200-day EMA).

· Momentum and Trend: However, the internal market data does not show an "escape velocity". The trend strength has just shifted from "closed" to "open", far from reaching a "strong" level; the momentum indicator hovers near neutral; prices have yet to convincingly reclaim the short-term moving averages.

· Short-term forecast: This means that the long-term structure of the market remains bullish, but buyers are "tentatively entering" and have not yet dominated the market. Until Bitcoin effectively breaks through and maintains above the $118,000 to $120,000 range, the oscillation between $110,000 and $125,000 remains the basic forecast. The forecast leans towards bullish, believing that the likelihood of Bitcoin holding at $112,000 and revisiting $120,000 is higher than breaking below $100,000.

Mainstream Altcoin Trend Divergence: Ethereum Weakness, Solana Under Short-Term Pressure

Compared to Bitcoin, the rebound performance of major altcoins varies, highlighting the fragmentation of market confidence.

· Ethereum (ETH) recovers weakest: Although the price of Ethereum has reclaimed the $4,000 low, its rebound appears weaker on internal indicators. The trend strength of ETH lags behind Bitcoin, suggesting that its rise may lack sustainability until momentum shows significant improvement. While the short-term moving averages remain above the long-term moving averages, the structure remains constructive, and Q4 has historically been a favorable season for ETH, seasonal factors are merely facilitators and cannot replace actual demand.

· Short-term Conflict of Solana: Solana is signaling bearish in the short-term timeframe, but its long-term structure remains intact. This divergence in timeframes typically only resolves after Bitcoin determines its direction. Solana's price is expected to continue experiencing sharp zigzag fluctuations and mean reversion until macro or crypto-native catalysts force the market to break the deadlock.

Market Outlook: Is it a "Healthy Cleansing" or a "New Round of Warnings"?

The structural impact of this wave of liquidations has put the market at a crossroads: is it a "one-time cleansing" necessary at the end of a bull market, or the "initial cracks of systemic risk"?

· "Healthy Purification" Argument: Supporters believe that the reduction of market leverage, optimization of position structure, and the elimination of weak hands have laid the foundation for a subsequent healthy rise.

· "Stay vigilant" argument: Opponents point out that shocks caused by political factors are rarely resolved by a single headline. Tariff risks may further spread and worsen through channels such as supply chains, corporate profits, and interest rates, thereby negatively impacting market liquidity and risk appetite.

In summary, the market engine has been started, but the RPM has not yet increased. The current state is a Reset, rather than a Renaissance. If Bitcoin can recover and stabilize above the congestion zone before the crash, momentum funds will accelerate their buying; if it falls below the $110,000 range, last week's "purification" will quickly turn into this week's "warning."

Note: This article is for informational purposes only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make decisions with caution.