Bitcoin Ends October in the Red for the First Time Since 2018: What’s Next for Crypto in 2025?
- Why Did Bitcoin Break Its October Winning Streak in 2025?
- The $126K Flash Crash: What Triggered the Record Liquidation?
- Fed Policy Paralysis Adds Fuel to Crypto Volatility
- Bitcoin vs. Traditional Markets: Who’s Winning in 2025?
- FAQ: Your October Crypto Crash Questions Answered
Bitcoin snapped its seven-year streak of positive October performances with a 5% drop this year, driven by risk-off sentiment, Leveraged liquidations, and macroeconomic uncertainty. Despite the pullback, BTC remains up 16% year-to-date, outperforming traditional markets like the S&P 500. We break down the record-breaking $126K-to-$104K flash crash, Fed policy impacts, and why analysts warn of more volatility ahead—plus key lessons for crypto traders.
Why Did Bitcoin Break Its October Winning Streak in 2025?
For the first time since 2018, Bitcoin closed October lower—down ~5%—as a perfect storm of factors hit crypto markets. The dip came despite BTC hitting a fresh all-time high of $126,000 earlier in the month before plunging to $104,782 in a 48-hour liquidation frenzy. According to CoinMarketCap data, over $12B in leveraged positions were wiped out, the largest single-day crypto liquidation event ever recorded. "This shows how concentrated crypto markets still are," noted the BTCC research team. "When Bitcoin and ethereum sneeze, altcoins catch pneumonia—we saw 10% drops in minutes."
The $126K Flash Crash: What Triggered the Record Liquidation?
The selloff began on October 10 when former President Trump announced a proposed 100% tariff on Chinese tech imports, including AI and EV components. crypto markets, already jittery from Fed Chair Powell’s hawkish remarks, collapsed as traders raced to exit leveraged positions. TradingView charts show Bitcoin’s 15% intraday drop was its steepest since the 2022 FTX collapse. JPMorgan CEO Jamie Dimon’s warning of an impending "major stock correction" within two years further spooked investors. Wintermute’s OTC desk head Jake Ostrovskis put it bluntly: "Everyone’s walking on eggshells after that liquidation bomb."
Fed Policy Paralysis Adds Fuel to Crypto Volatility
Compounding the chaos, a U.S. government shutdown blocked access to key economic indicators like CPI data—the Fed’s North Star for rate decisions. "It’s like flying blind," one BTCC analyst told me. "When traders can’t gauge monetary policy direction, they either sit tight or overreact." The uncertainty crushed crypto’s typical October momentum, though Bitcoin’s year-to-date gains still dwarf traditional assets. Fun fact: The S&P 500 hasn’t had a 5% correction in 130 trading days—its third-longest streak since 1980. But as any crypto vet knows, calm markets often precede storms.
Bitcoin vs. Traditional Markets: Who’s Winning in 2025?
Despite October’s stumble, Bitcoin’s 16% YTD return beats the S&P 500’s 16.3% (including dividends). Even the classic 60/40 portfolio only managed 13.1%, per Vanguard data. But here’s the kicker: Over three years, the S&P’s 22.8% annualized return ranks in the top 10% of historical periods since WWII. Crypto’s wild swings make such consistency impossible—last month alone saw BTC swing between $104K-$126K. As one hedge fund manager joked: "Crypto years are like dog years; one month equals seven elsewhere."
FAQ: Your October Crypto Crash Questions Answered
How much did Bitcoin drop in October 2025?
BTC fell approximately 5% in October 2025, marking its first negative October since 2018.
What caused Bitcoin’s flash crash to $104K?
A combination of Trump’s China tariff threats, Fed policy uncertainty, and record leveraged liquidations ($12B+) triggered the drop from $126K.
Is Bitcoin still a good investment after October’s drop?
With 16% YTD gains, BTC continues outperforming most assets. However, crypto’s volatility means investors should only allocate what they can afford to lose.
