Crypto Traders Lick Their Wounds After $19bn Meltdown. But Is Bitcoin’s Floor Finally In?
A week after one of the biggest liquidation cascades in recent memory wiped out US$19 billion in crypto positions, traders are still trying to work out whether the worst is over or just beginning.
During Kraken’s latest Trading Spaces recap, professional trader Dentoshi and Matt Howells-Barby, Kraken’s VP of Growth, unpacked the chaos that shook the market — and what might come next.
The Great Flush
Last Friday’s bloodbath effectively reset the crypto landscape. Leveraged longs were vaporised as Bitcoin plunged through key technical levels, forcing automatic sell-offs across exchanges. The result was a wholesale repositioning that left the market staggering.
“This was a proper liquidation cascade,” Dentoshi said. “We’re right below resistance but also right above the last-chance supports. It’s chop city until it’s not.”
Since the wipeout, Bitcoin (BTC) has repeatedly tried and failed to reclaim the US$98,000 support zone, a level traders now regard as the line between recovery and relapse. The indecision has created a limbo market — too weak for a breakout, too oversold for a crash.
The Macro Cross-Currents
Crypto may like to think of itself as separate from the global economy, but macro headwinds are still doing the steering. Dentoshi and Howells-Barby pointed to three key culprits behind the recent volatility:
- China–US tariff tensions, which have rekindled fears of a renewed trade war.
- Private-credit stress, particularly in mid-tier corporate debt, which is bleeding into risk assets.
- Upcoming CPI data, a wildcard that could shift rate-cut expectations overnight.
With liquidity already thin and traders shell-shocked from forced liquidations, these factors have kept risk appetite in check. As Dentoshi put it, “You can’t fight macro, and you can’t fight margin calls.”
The Playbook
For now, the message is caution. Dentoshi advised traders to respect the US$98,000 support and avoid trying to catch every micro-move. The focus, he said, should remain on major coins like Bitcoin and Ethereum until broader market participation, or “breadth,” improves. Only then does it make sense to rotate into altcoins, which remain highly correlated and prone to exaggerated swings.
The view from Kraken is similar: volatility is not inherently bad, but under-capitalised traders tend to get punished hardest when leverage becomes the market’s drug of choice.
The Takeaway
So, are we near a bottom? Possibly — but nobody’s calling it yet. The market looks technically exhausted, sentiment has cratered, and forced sellers have mostly been cleared out. Yet without a fresh macro catalyst or influx of liquidity, rallies may die as quickly as they start.
As Howells-Barby summed it up, “This is the phase where patience matters most. Survive the chop, and the opportunity comes next.”
Until then, traders are stuck in what Dentoshi called the twilight zone of crypto: a market balanced precariously between recovery and another round of pain.
Source: Kraken Blog – “Trading Spaces Recap: One Week After the $19 B Wipeout”
