BTC Yearly Trend Turns Down + $19B Liquidation: How the "Macro Thunder" at the End of 2025 Crushed the Crypto Market (In-Depth Explanation)

BTC Yearly Trend Turns Down + $19B Liquidation: How the “Macro Thunder” of 2025 Crashed Through the Crypto World (In-Depth Explanation)

October Hits Record High → Tariff/Export Control News → Chain of Leveraged Liquidations (> $19 billion) → Yearly Trend Turns Down (First time since 2022). Disclaimer: This article is for informational and risk education purposes only and does not constitute investment advice.

5 Sentences Summary

In 2025, Bitcoin’s yearly trend turned down, widely interpreted as “BTC behaving more like a macro risk asset” rather than an independent market. BTC hit a record high of over $126,000 in October, but subsequent retracement was significant. Around October 10–11, the market triggered a “forced liquidation waterfall” under low liquidity, with over $190 billion in liquidations, setting a new record. One direct trigger was macro policy shocks such as tariffs and export controls, causing market sentiment to switch from “optimistic” to “panicked” within hours. This is not “a project blowing up,” but a structural chain reaction caused by leverage, liquidity, and exchange risk control rules under pressure.

I. Event Timeline: From “Peak” to “Yearly Trend Turn Down”

1. Early October: Record High (Market in “Tailwind” phase)

Reuters reports that BTC approached/ hit a record high in early October, with a peak price in the $125,000–$126,000 range.

Typical market conditions at that time:

“Strong bullish consensus”: trend traders and momentum buyers more willing to leverage; Derivatives more active: perpetual contracts, options trading volume increased, market structure more fragile; When “adverse news” appears, volatility is amplified by leverage.

2. October 10–11: Macro News Hits → Largest Liquidation Cascade in History (> $190 billion)

Multiple Reuters reports linked this crash to policy statements on tariffs/export controls, followed by over $190 billion in liquidations, dubbed “the largest forced liquidation in crypto history.”

Industry research also emphasized that this event was essentially “leverage meeting liquidity”: when prices broke through key position zones, forced liquidations triggered further sell-offs, causing nonlinear declines.

Meanwhile, CoinShares’ review noted that during this period, BTC briefly dipped to around $104,782, illustrating the typical risk of “quick retracement after a peak.”

3. End of Year: Yearly Trend Turns Down (First time since 2022)

Reuters reported on 2025-12-31 that BTC was expected to record over a 6% annual decline, attributing this to macro trends and “rising correlation with risk assets.”

II. Why Can “New Highs” Still Lead to “Yearly Trend Turn Down”? — The Key: BTC’s Pricing Logic Has Changed

Core change in 2025: BTC is more like “a part of global risk assets.” Reuters explicitly states that Bitcoin’s movement increasingly resembles US stocks and other risk assets, influenced more by macro and geopolitical factors.

Past BTC was more like “internal crypto cycles”: halving, on-chain narratives, exchange and project events. Now BTC is more like “macro beta”: interest rate expectations, US dollar liquidity, tariffs/trade conflicts, risk appetite. When the market is in a “fragile state” (high leverage, thin liquidity, concentrated positions), macro shocks can break the structure.

III. What Does >$190 Billion Liquidation Really Mean?

Many have heard of “liquidation,” but not truly understood “why it causes waterfalls.” Here’s a three-step chain explanation:

Step 1: Leverage turns “normal retracements” into “forced sell-offs”

In perpetual contracts, positions have maintenance margin requirements. When prices fall near certain “liquidation lines,” exchanges forcibly close positions (equivalent to market sell orders). Once forced liquidations happen en masse, selling pressure becomes “automated and mechanical,” accelerating market declines.

Step 2: Liquidity dries up, causing “more selling leads to lower prices”

FTI Consulting’s review emphasizes that under pressure, liquidity and exchange design amplify volatility—when order books thin, forced sell orders can break through multiple price levels.

Step 3: Chain reaction triggers “self-fulfilling collapse”

Price drops → triggers more forced liquidations → increased sell pressure → even lower prices This is the positive feedback loop of the “liquidation waterfall.” CoinShares also links this >$190 billion liquidation to tariff news and increased volatility, providing details on key price dips.

IV. 6 Hard Lessons for 2026 from This Event

1. Treat BTC as a “macro risk asset”

When macro shocks occur (tariffs/trade, interest rates, US dollar strength/weakness), BTC’s volatility may resemble high-beta stocks.

2. “Leverage” is not about increasing returns, but increasing bankruptcy risk

Leverage amplifies tail risk exposure. October’s event is a textbook case.

3. The most dangerous times are low liquidity periods

Weekends, holidays, Asian/European market overlaps—order books are thinner, making forced liquidations more likely to “break through prices.”

4. Focus on “Position Structure” more than “News Headlines”

Open interest (OI) levels; Funding rates whether persistently positive (longs crowded); Implied volatility (IV) in options whether pushed to extreme lows (calm markets are actually riskier); Concentration of liquidation zones on exchanges/on-chain.

5. Learn to “Layer Positions + Have Plans,” avoid reacting on the spot

Long-term spot holdings: manage independently, avoid being caught by short-term leverage; Trading positions: set clear stop-loss/reduction rules, reduce leverage when structural risks appear.

6. The most important point: you must assume “forced liquidation waterfalls will happen again”

Market structure dictates: as long as leverage exists, waterfalls will recur periodically; the only difference is in scale and trigger points.