I asked ChatGPT which quote best captured the story of this week, and the answer it gave me was a quote from Jesse Livermore. It’s a bit long, but at its core, it boils everything down to just two words: emotion in investing.
The market doesn’t actively make anyone lose. It simply reflects supply and demand, and crowd psychology. Losses usually come from how participants react.
Many people correctly identify the market’s direction, yet collapse under short-term volatility. Panic selling, FOMO buying, increasing leverage to shorten the path to their goals — all of these erode long-term advantage.
As Livermore also famously said: “Sitting tight is how the big money is made.”
#MARKET | TL;DR
BLACK FRIDAY
BITCOIN: Bitcoin plunged nearly 16%, from $122K down to $103K in under five hours. It has since rebounded roughly 8%, trading around $111K. Bitcoin dominance (BTC.D) briefly spiked to 63.5% before cooling back toward 60%.
ALTCOIN: Almost no Altcoin escaped this crash. Many coins saw price collapses of 88–90% before rebounding. Total stablecoin supply dropped by $4 billion amid the volatility.
STOCK: The S&P 500 reacted with a nearly 3% drop before markets closed for the weekend, interrupting its extended streak of new all-time highs.
MACRO: Unlike previous episodes, this round of trade tension was reignited by China, centered around rare earth materials. Trump responded with a 100% tariff set to take effect on November 1.
This week’s sharp sell-off across financial markets was the result of multiple pressures building over time:
The U.S. government shutdown lasting more than 10 days
Renewed fears of a bubble
Recession concerns
These three forces had already been constraining the market for weeks, preventing investors from fully aligning in one direction. The resurgence of trade tensions became the final straw, triggering a massive sell-off that wiped out:
Over $1.5 trillion in stock market value
More than $900 billion in crypto
A record $20 billion in crypto liquidations
Unsurprisingly, pessimism returned, along with the familiar question:
Is the market about to roll over into a new downtrend?
Let’s put this crash under the ultrasound and examine it more closely:
The U.S.–China trade war never truly went away. It has lingered since Trump first unveiled reciprocal tariffs in April. While agreements were reached with some countries, the core standoff with China remains unresolved. The market had simply pushed it aside due to a lack of new developments.
Reviewing the move itself: before rebounding 8%, $BTC’s maximum drawdown was just under 16%. This is not extreme when compared to historical downtrend-defining crashes, such as the May 11, 2021 drawdown of 45% or the FTX collapse near 30%.
Negative sentiment has been amplified by the 30–90% declines across most Altcoin. However, the true driver was a long squeeze domino, fueled by excessive leverage. Of the record $20 billion in liquidations, nearly $17 billion were long positions.
Meanwhile, the U.S. dollar continues to weaken as the Fed moves further down its rate-cutting path due to labor market weakness. This backdrop still supports risk assets overall in a stagflationary environment. You can revisit last week’s analysis for more context.
Saturday was especially brutal for anyone using leverage. Even positions at 1.5x leverage were wiped out.
For spot investors focused on narratives with strong fundamentals, however, this was an opportunity. If there’s any reason to be upset, it’s not because prices fell — it’s because you didn’t have more cash to deploy.
This crash was largely the result of excessive leverage building up, leading to a cascade of forced liquidations. Bitcoin only fell about 15%, while the S&P 500 remains near its highs after a modest 3% pullback.
Personally, I see no reason to turn bearish here.
Trade tensions returning may simply extend the timeline before the market reaches the most favorable phase of this cycle.
The U.S.–China trade conflict still has room for negotiation. Trump’s retaliatory tariffs won’t take effect until November 1, one month before China’s most severe countermeasures are scheduled to begin.
This makes the situation highly uncertain. China has been aggressively accumulating gold and holds significant leverage in rare earth production, a critical resource of the 21st century. If this were a poker table, China likely believes it still has several cards left to play.
As a result, tariff narratives may remain murky for some time.
And during that time, your job is to observe what has real, durable value, and continue accumulating.
This is the moment to apply two timeless Buffett quotes:
“Be fearful when others are greedy, and greedy when others are fearful.”
“Only when the tide goes out do you discover who’s been swimming naked.”
The crypto market has changed dramatically. Stop fantasizing about overnight riches, then panicking into reckless leverage or PvP memecoin frenzies like we’ve seen recently.
#SPOTLIGHT
It’s Not Just About “Liquidations”
This record-breaking liquidation event also sparked debate over whether exchanges should automatically reduce leverage to protect liquidity providers or to protect traders.
The most prominent comparison emerged between Binance, Hyperliquid, and Lighter.
I came across a detailed article explaining the two different operational models, which you can read here.
Personally, I don’t dwell too much on this debate. It reminds me of arguments like iOS vs Android, or Ethereum vs Solana.
What does matter is what this event demonstrated:
Perpetual trading on DEX has matured significantly.
Perp DEX are now operating far more efficiently than in previous cycles, when low liquidity and weak infrastructure limited complex products like perpetual trading.
Just as spot DEX are steadily eating into CEX market share, perpetual trading on DEX is beginning to tell the same story.
#SPOTLIGHT
Music Stops. Lights Off. Everyone Goes Home.
Midweek, while many were chasing memecoin waves on BNB Chain, I asked myself one question:
How long will this meme cycle on BNB Chain actually last?
I ask because I still don’t see a strong reason for memecoin on BNB Chain to succeed the way it did on Solana.
Why?
Memecoin on BNB Chain emerged long after Solana’s meme cycle had already played out. When the same game is repeated, players become better, more defensive, and exits happen faster. ROI shrinks. Lifecycles shorten.
This explains why previous BNB Chain meme cycles were brief.
This third iteration brings nothing new. Memecoin on BNB Chain relies almost entirely on CZ and Binance’s image, rather than forming a cultural arena where tokens organically PvP against one another.
The result: roughly 90% of memecoin traders who moved from Solana to BNB Chain lost money.
#SPOTLIGHT
1 ZCASH = 0.1 BTC
Zcash ($ZEC) cannot be ignored this week. While nearly everything else crashed, $ZEC surged 80% in a single week.
Its rally has reignited interest in privacy-focused assets. The prevailing narrative is that ZEC serves as a beta play on Bitcoin — even being framed by some as a “second Bitcoin.”
#IN-DEPTH_CRYPTO
What Is On-Chain Capital Doing?
1. Total Value Locked (TVL)
TVL across ecosystems was impacted, but the key takeaway is that on-chain activity remained smooth during the crash.
Solana, once infamous for outages, successfully demonstrated its ability to process 100,000 TPS while remaining stable through a massive liquidation stress test.
2. Spot DEX Volume
Spot trading volume continues to concentrate around BNB Chain, Ethereum, and Solana. While Hyperliquid dominates Perp trading, spot demand on its ecosystem has yet to meaningfully differentiate.
#THE_SYMBOL
PIC OF THE WEEK
The current trade war looks exactly like a poker table.
On Polymarket, nearly 80% of participants believe Trump is bluffing against Xi.
In poker history, the legendary “Tôm Đú” has pulled off iconic bluffs even with terrible hands. But in this match between Trump and Xi, no one truly knows who is bluffing whom. What is certain is that escalating trade tensions will hurt both sides.
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