Q4 2025 has delivered the crypto market’s worst start since 2018, with Bitcoin (BTC) plunging below $113,000 and Ethereum (ETH) dipping to $4,070, mirroring the 2018 bear market’s intensity. The downturn, erasing over $1T from the market cap, was ignited by President Trump’s 100% tariff threat on China on October 10, causing the largest liquidation event in history$19B wiped out in hours. Fed Chair Jerome Powell‘s hawkish comments post-rate cut, signaling no “foregone conclusion” for December easing, exacerbated the pain, reducing cut odds from 90% to 71%.
The October 10-11 cascade liquidated 1.66M traders, with BTC dropping 18% from $126,000 and altcoins suffering “COVID-level nukes.” Trader Pentoshi captured the sentiment: “There are a lot of people in incredible pain right now, myself included.” Follow-up waves on October 30 ($1.12B) and November 3-4 ($1.37B) deepened the deleveraging, with open interest collapsing from $65B to early-2025 levels. ETH and altcoins bore the brunt, with Solana (SOL) and XRP down 35-40%, per CoinGlass data.
Powell‘s October 29 remarks further rate cut in December was not a foregone conclusion,” shifted futures pricing, strengthening the dollar, and pressuring risk assets. U.S.-China trade tensions, U.S. government shutdown (day 35), and tech earnings misses amplified the rout, correlating crypto with Nasdaq declines. ETF outflows reached $1.54B, with BTC and ETH funds reversing July gains.
Historical parallels to 2018 suggest capitulation near, with the Fear & Greed Index at 20 (Extreme Fear). Analysts like Arthur Hayes predict chop until “stealth QE,” while Kraken’s Thomas Perfumo sees stabilization post-October 10 reset. Institutional absorptionMicroStrategy adding BTC, ETFs holding 99.5%provides a floor, with BTC dominance rising as flight-to-quality. Potential catalysts: Fed QT pause (Dec 1), crypto bill passage, and ETF approvals could spark a Q4 rebound to $120K BTC.
