Crypto Market Recovery After $500B Crash Positions Q4 for Major Rebound: BTC, ETH Analysis

The cryptocurrency market experienced a severe flash crash that erased over $500 billion in value, triggering massive liquidations and infrastructure strain. Bitcoin (BTC) plummeted 13% within one hour while some altcoins crashed over 40%. According to Bitwise portfolio manager Jonathan Man, this represented one of the worst liquidation events in crypto history, wiping out $65 billion in open interest. Despite the dramatic sell-off, markets have begun recovering with the CoinDesk 20 index gaining 7.7% in the past 24 hours. Major exchanges like Binance faced technical issues causing wrapped assets including wBETH to deviate significantly from underlying prices. The exchange has committed to compensating affected users and implementing more stable pricing models. Market experts suggest the crash served as a necessary market reset. "If President Trump's position softens, we will see crypto assets higher during Q4," stated Stuart Connolly, CIO at Deus X Capital. Derivatives data shows shifting sentiment with $626 million in recent liquidations favoring short positions. Key developments to watch include CME Group's planned SOL and XRP options launch and ongoing governance votes in major DAOs. Bitcoin dominance remains elevated at 58.45%, while derivatives markets indicate returning bullish sentiment with BTC options showing increased call volume and positive skew metrics.