Bitcoin’s 2025 Struggle: Did October 10 Break Crypto Markets?

Bitcoin is currently down 7% year-to-date in 2025, a performance that, if it holds, would place it in rare company. Historically, Bitcoin has only closed a year in the red on three occasions: 2014, 2018, and 2022. All three were characterized as bear market years, a label that does not officially apply to 2025’s broader context. This anomaly has led analysts and experts to question if something fundamental is broken within the crypto market structure. The focal point of this concern is overwhelmingly a single day: October 10.

On that date, Bitcoin prices crashed by 10%, shedding over $12,000 in value in what has been described as the industry’s largest leverage flush. Investor George Bodine, cited in the original CryptoPotato report, called it “the pivotal moment to where we sit today,” noting that “the overhang of ‘Crashtober’ still haunts us.” The event was so severe and unexplained that it sparked public alarm from figures like analyst ‘Max Crypto’, who questioned the health of exchanges and market makers, drawing a chilling comparison to the period before the catastrophic Luna collapse.

The immediate damage of the October 10 crash was a violent repricing, but analysts argue the deeper, more persistent wounds are structural and psychological. Crypto analyst Scott Melker stated that the day “exposed problems that still haven’t been fixed,” primarily citing a market where “liquidity remains severely compromised.” He explained that market makers have become more cautious, not less, in the aftermath, exacerbating the thin trading conditions and making the market prone to sharp, fast sell-offs.

This liquidity crunch is compounded by a troubling capital flow pattern. Melker observed that altcoins show “no genuine recovery,” bleeding value whenever Bitcoin weakens without attracting new investment. This behavior indicates that money is exiting the crypto market entirely rather than rotating between assets—a key sign of an unhealthy market lacking in fresh conviction. Beyond the mechanics, Melker pinpointed a critical psychological break: “October 10 broke something psychologically. It reminded everyone that this market can still just… fall apart. And once that realization sets in, behavior changes for a long time.”

Not all analysis views the October 10 event as a market-breaking catastrophe. Analyst ‘CrediBULL Crypto’ offered a more measured perspective, framing it as “a massive deleveraging event.” The data supports this: aggregate open interest (OI), which reflects the total value of outstanding derivative contracts, has been declining steadily since the crash. CrediBULL Crypto interprets this as a sign that “confidence in positioning via perps [perpetual contracts] has definitely taken a hit.”

However, this analyst argues that the purge of excessive leverage is not inherently negative for the market’s long-term health. “Less leverage in the system is not a bad thing,” they opined, “as it simply means this next rally is even more sustainable than the prior one.” The thesis is that if Bitcoin’s price can find a bottom in the current region and begin a sustained rise, traders will return, and open interest will recover organically, building a more stable foundation than the over-leveraged environment that preceded the October flush.

Adding to the market’s paradoxical state is the apparent strength of Bitcoin’s underlying fundamentals. George Bodine, even while acknowledging the damage from October, stated, “I have never seen the fundamentals behind Bitcoin as strong as this year.” This creates a stark disconnect between the asset’s perceived long-term value and its current fragile price action, which as of late December 2025 saw Bitcoin struggling to maintain momentum above $87,000.

The central question for the market, as framed by the original report, remains unresolved: Did October 10 break crypto? The evidence suggests it fractured key pillars of market health—liquidity and trader psychology—while also forcibly resetting risky leverage levels. The path forward hinges on whether the market interprets the deleveraging as a cleansing necessary for a healthier advance, as CrediBULL Crypto suggests, or as a traumatic event that has driven lasting capital and confidence away, as warned by Scott Melker. Until liquidity, participation, and conviction realign, the shadow of October 10 will likely continue to loom over every rally and sell-off.