Traders Brace for Further Pain as $600 Billion Evaporates in Panic Sell-Off

October 17, 2025 | New York - Bitcoin's meteoric rise came to a screeching halt on Friday as the cryptocurrency plunged below $105,000, accelerating a brutal sell-off that has erased nearly $600 billion from the total crypto market capitalization in a matter of days. The sudden free fall, which saw the world's largest digital asset drop as much as 3% in early trading, has ignited widespread panic among investors, with prices now hurtling toward the psychologically significant $100,000 mark.

The downturn marks a stark reversal from the highs of last week, when Bitcoin briefly stabilized around $115,000 following a dramatic crash triggered by renewed economic uncertainties, including President Trump's recent tariff announcements that rattled global markets. Analysts described the latest plunge as a "painful reflex" after the prior week's events, evolving into a "massive sell-off in search of a new bottom." The broader crypto market shed 5% in the last 24 hours alone, shrinking its overall value to $3.57 trillion and dipping perilously close to the critical 200-day moving average of $3.50 trillion—a level that could either spark a rebound or precipitate even steeper losses.

"This will be brutal," warned Lark Davis, author of the Wealth Mastery newsletter, echoing the sentiments of traders who fear Bitcoin could soon test the $90,000s or even $80,000s if the momentum persists. Alex Kuptsikevich, chief market analyst at FxPro, added to the gloom, noting that unlike a mere slip in a thin market, this decline signals deeper structural pressures, with the crypto ecosystem now bracing for what could be the largest wipeout in its history—nine times the scale of the February 2025 crash.

The trigger for this week's renewed turmoil appears tied to a confluence of factors: escalating geopolitical tensions, a strengthening U.S. dollar amid Federal Reserve signals of tighter policy, and profit-taking by institutional investors who had piled into Bitcoin earlier this year on expectations of favorable regulatory shifts under the new administration. Binance-linked tokens, often seen as a bellwether for altcoin health, have also struggled, dropping in tandem with Bitcoin and underscoring the interconnected fragility of the sector.

Market participants are rushing to hedge against further downside, with options trading volumes surging and calls for protective puts reaching record levels. "We're not out of the woods yet," said one anonymous hedge fund manager speaking to xAI News. "This feels like 2022 all over again, but with higher stakes."

As of midday Friday in New York, Bitcoin was trading at $104,200, down over 9% from its Monday open. Ethereum and other major altcoins fared even worse, with losses exceeding 7%. The question now is whether this is a temporary capitulation or the prelude to a prolonged bear market—one that could redefine the crypto narrative just months after its much-hyped resurgence.