tl;dr
Bitcoin and Ethereum rebounded sharply after a historic liquidation event, fueled by institutional investors snapping up assets at discounted prices. The surge was driven by massive buying on platforms like Coinbase, with analysts questioning whether the crash was a planned 'structural purge' to res...
**Bitcoin and Ethereum Surge as Institutional Buying Stabilizes Markets Amid Historic Liquidation Event**
Bitcoin and Ethereum have both staged a remarkable recovery following one of the most significant liquidation events in crypto history, with Bitcoin climbing back to a peak of $116,000 and Ethereum surging to $4,200. The rebound, fueled by strong institutional buying, has sparked renewed optimism in the cryptocurrency market, which had previously been hit by a severe sell-off linked to geopolitical tensions and leveraged trading dynamics.
### **Institutional Accumulation Drives Recovery**
The recovery was largely driven by large-scale institutional investors, who capitalized on the market downturn to accumulate Bitcoin and Ethereum at discounted prices. According to CryptoQuant, Bitcoin’s **Coinbase Premium Index**—a metric that measures the price difference between USD pairs on Coinbase and USDT pairs on Binance—reached a 19-month high of 0.182 on October 10. This spike indicated heightened demand from U.S.-based institutions, even as Bitcoin’s price dipped below $110,000.
Typically, such market corrections see the Coinbase Premium Index turn negative due to selling pressure from U.S. investors. However, the unexpected rise suggests that institutional players viewed the sell-off as an opportunity to "buy the dip," locking in long-term positions at lower levels. This activity has potentially established a new support floor near $110,000 for Bitcoin, with analysts noting that sustained institutional accumulation could counteract further downside pressure and set the stage for a renewed rally.
Ethereum mirrored this trend, with its Coinbase Premium Index soaring to 6.0—the highest level of 2025—as institutions aggressively accumulated the asset during the downturn. "This stark divergence between U.S. and global market sentiment underscores the strong long-term conviction held by major players in Ethereum’s future," CryptoQuant stated.
### **A Structured Purge or a Pre-Planned Collapse?**
The recent volatility was not purely a result of market panic but appeared to be a calculated event, according to analysis by *Bull Theory*. The firm suggested that the liquidation event was triggered by U.S. President Donald Trump’s October 11 announcement about potential 100% tariffs on Chinese imports.
In the days leading up to the announcement, a major crypto whale—identified as one of Bitcoin’s oldest wallets—began opening massive short positions on both Bitcoin and Ethereum, totaling billions of dollars. When Trump confirmed the tariffs, global markets reacted sharply: the S&P 500 fell over 2%, Bitcoin plummeted to $102,000, and altcoins collapsed by as much as 90%. Over $20 billion in positions were liquidated, and the crypto market lost roughly $1 trillion in value within hours.
*Bull Theory* highlighted that the same whale doubled their short exposure 30 minutes before Trump’s announcement and closed positions for an estimated $200 million profit. This sequence of actions, the analysis argued, appeared deliberate, suggesting a systemic deleveraging event rather than a retail-driven crash. Stablecoins even briefly depegged, adding to the chaos.
### **A Repeat of Past Market Cycles?**
The firm likened the event to historical "structural purges" seen in March 2020 and mid-2023, when excessive leverage was cleared from the market, paving the way for subsequent bull runs. "This liquidation may have been a necessary reset," *Bull Theory* wrote, "clearing out weak hands and setting the stage for a stronger, more resilient market."
### **What’s Next for Crypto?**
With institutional buyers stepping in to stabilize prices and absorb selling pressure, the path for Bitcoin and Ethereum appears cautiously optimistic. Analysts are watching closely for signs of sustained demand and potential catalysts, such as regulatory developments or macroeconomic shifts, that could ignite the next bullish phase.
As the market digests this week’s turmoil, one thing is clear: the role of institutional capital in shaping crypto’s trajectory is growing. Whether this recovery marks the start of a prolonged bull run or a temporary rebound, the resilience of major players like Bitcoin and Ethereum suggests that the crypto market is far from finished evolving.
For now, the focus remains on how these institutional forces will continue to influence price movements and investor sentiment in the months ahead.