Bitcoin News Update: Crypto Market Liquidity Wipeout Wipes $370 Billion as Trader with Perfect Record Suffers $38 Million Loss

October 2025 brought a devastating downturn to the crypto market, with record-breaking liquidations and global political unrest shaking even the most experienced investors. One notable victim was a trader with a flawless record, who suffered a $38 million loss during what analysts describe as the sector’s harshest month in almost ten years, according to

. The collapse was set off by a series of shocks, including President Donald Trump’s unexpected announcement of a 100% tariff on Chinese goods, which erased $19.37 billion in leveraged trades within a single day—almost nine times the losses seen in February’s correction. (BTC) plunged by 18%, (ETH) dropped 20%, and alternative coins such as and saw their prices fall by 60–80%.

Experts described the event as a “liquidity purge,” with open interest plummeting to levels not seen since early 2025. By October 29, the overall market value had shrunk by $370 billion, erasing years of progress. Traders who had previously navigated market cycles with skill found themselves caught in a storm of excessive leverage, scarce liquidity, and global uncertainty. One investor, who had maintained a perfect win record through bold long positions in

and , saw their holdings wiped out when a $5 million Ethereum position—recovered after the October 11 crash—was liquidated during the October 31 selloff, as reported by .

The Federal Reserve’s decision to cut rates by 25 basis points on October 31, initially viewed as a positive move for risk assets, instead intensified the selloff. Many traders saw it as a cue to exit, resulting in $890 million in liquidations within a day. Bitcoin slipped 0.5% to $109,727, while Ethereum fell to $3,852. The Crypto Fear & Greed Index dropped to 29, its lowest point since the

Luna crisis.

Alternative cryptocurrencies suffered the most. Bitcoin’s market share climbed above 60%, suggesting a postponed altseason in 2025, according to

. Investors who spread their bets across smaller tokens faced steep losses as liquidity vanished. “This is the most brutal crypto bull market ever,” said analyst Scott Melker, pointing out that only BTC and ETH holders saw significant gains, as noted by . Two bullish traders, who had previously realized over $17 million in profits with win rates of 100% and 69.2%, saw their earnings wiped out as altcoins collapsed.

The crash highlighted deep vulnerabilities within the crypto sector. Excessive leverage, heavy exposure to U.S.-China trade tensions, and the Federal Reserve’s hawkish signals created a cycle of fear and selling. By October 29, the market had shed 1.5% of its capitalization, standing at $3.7 trillion. While some experts see this as a mid-cycle pullback, others warn of more serious underlying issues. “This wasn’t just a correction—it was a purge,” one market commentator wrote.

Now that the chaos has subsided, traders are left to assess the fallout. For the trader with a perfect record, the $38 million loss is a stark reminder of how quickly even the most disciplined strategies can unravel in such a volatile market.