Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Cryptocurrency markets experienced a historic flash crash on Friday, October 10, following an announcement from President Donald Trump that he would impose 100% tariffs on all Chinese products starting November 1. The news triggered a massive deleveraging event, leading to Bitcoin plunging from above $125,000 to briefly below $102,000, and Ethereum dropping below $3,800. This market turmoil resulted in the liquidation of 1.6 million traders and the evaporation of $19 billion, marking the largest single-day wipeout in crypto history, surpassing the combined losses of the FTX collapse in 2022 and the COVID market crash.
Bitcoin’s Tentative Rebound
Bitcoin has since recovered to trade around $115,089, bouncing near its 200-day Exponential Moving Average (EMA). Prediction markets, such as Myriad, indicate strong short-term bullish sentiment, with over 90% odds that BTC will remain above $112,000 and a 74% likelihood of hitting $120,000 before falling to $100,000.
However, technical indicators suggest a recovery lacking strong conviction. Bitcoin’s Average Directional Index (ADX) at 25.76 barely crosses the threshold for trend establishment, implying movement without significant momentum. The Relative Strength Index (RSI) at 46.48 sits in neutral-to-bearish territory, indicating a lack of aggressive buying post-selloff.
Despite these cautious signals, the long-term structure remains bullish, with the 50-day EMA still above the 200-day EMA. The Squeeze Momentum indicator also signals an upward bias following a consolidation phase. Traders should anticipate choppy price action between $110,000 and $125,000 in the near term.
Key Bitcoin Levels:
- Immediate Support: $110,000
- Strong Support: $107,000
- Immediate Resistance: $118,000
- Strong Resistance: $125,000
Ethereum Shows Weak Trend Strength
Ethereum’s price has rebounded to approximately $4,156, with Myriad traders giving 94% odds that ETH will stay above $3,800. Yet, its technical picture is more cautious than Bitcoin’s.
The ADX for Ethereum is notably low at 21.57, falling below the 25-point threshold for confirming directional movement, indicating weak trend strength among major cryptocurrencies. Its RSI at 46.75 mirrors Bitcoin’s neutral-to-bearish stance, suggesting neither buyers nor sellers have taken definitive control.
Historically, Ethereum has shown strong performance in the fourth quarter, with gains of +104% in Q4 2020 and +142% in Q4 2017. Despite this historical precedent and a preserved bullish long-term structure (50-day EMA above 200-day EMA), the current weak ADX readings suggest that any immediate upward movement might lack follow-through.
Key Ethereum Levels:
- Immediate Support: $3,950
- Strong Support: $3,500
- Immediate Resistance: $4,250
- Strong Resistance: $4,800
Solana Faces Conflicting Signals
Solana, currently trading around $197.22, presents the most complex technical landscape. Myriad traders are short-term bullish, assigning 88% odds for SOL to remain above $185, but are less convinced about a new all-time high above $294 by year-end, with odds at 44%.
Solana’s ADX at 22.82 is below the trend confirmation level, similar to Ethereum, indicating weak directional movement and a transitional phase. The RSI at 43.48 leans bearish, suggesting selling pressure slightly outweighs buying interest, characteristic of corrective phases within uptrends.
Bulls are attempting to push prices above the 50-day EMA, but the gap between short- and long-term averages is narrowing, and the recent bounce was weaker than the preceding dip. Despite extreme oversold conditions indicated by Bollinger Bands, suggesting potential for a strong bounce, conflicting momentum signals point to continued choppy price action.
Key Solana Levels:
- Immediate Support: $180
- Strong Support: $160
- Immediate Resistance: $220
- Strong Resistance: $240
Market Outlook: Caution Amidst Recovery
While Bitcoin, Ethereum, and Solana have all rebounded from the flash crash lows, technical indicators across the board suggest this recovery lacks strong conviction. The market appears to be in a digestion phase following the massive liquidation event, rather than confidently moving towards new highs. Traders should anticipate continued volatility and exercise patience, as a swift V-shaped recovery is unlikely given the weak trend strength readings. A cautious approach, waiting for clearer directional signals, is advisable before making aggressive bets.
