Analysts Identify Causes of Cryptocurrency Market Crash

The cryptocurrency crash on September 11 is unlikely to have long-term consequences.

The cryptocurrency crash on September 11 is unlikely to have long-term fundamental consequences, as it was driven by a combination of technical factors. This was stated by the authors of The Kobeissi Letter.

It’s official:

Crypto just saw its LARGEST liquidation event in history with 1.6 MILLION traders liquidated.

Over $19 BILLION worth of leveraged crypto positions were liquidated in 24 hours, 9 TIMES the previous record.

Why did this happen? Let us explain.

(a thread) pic.twitter.com/dHbkfNjrVs

— The Kobeissi Letter (@KobeissiLetter) October 11, 2025

The market collapse triggered a cascade of liquidations, with a daily volume reaching a record $19.3 billion. For the first time in history, the leading cryptocurrency recorded a daily candle at $20,000.

Among the factors causing the decline in digital assets, analysts cited “excessive leverage and risk,” as well as a statement by U.S. President Donald Trump about imposing 100% tariffs on imports from China.

Additionally, the head of state published his post after the traditional markets closed, and the reduction in liquidity created a favorable environment for increased volatility.

Experts also noted a strong bias towards long positions in the volume of liquidations. On most major exchanges, except Bitfinex, the share of longs exceeded 90%.

According to analysts, the market sell-off began about an hour before Trump’s initial threats towards China. The president’s statement accelerated the decline during what was likely an already underway correction.

“We believe this crash was caused by a combination of several sudden technical factors. It has no long-term fundamental consequences. A technical correction was long overdue. We are confident a trade deal will be reached, and cryptocurrency remains strong. We are optimistic,” they concluded.

The “Trump Factor” and Sentiment

Analysts at Santiment also believe that the reasons for the market’s decline are not solely rooted in Trump’s statement. In their view, retail traders rushed to find a single event as the crash factor, which is merely a sign of “typical rationalizing behavior.”

However, in the short term, trade relations between the U.S. and China will play a key role in crypto traders’ sentiment, experts acknowledged. Positive news could increase risk appetite, whereas a negative backdrop might lead to forecasts of “Bitcoin below $100,000.”

Meanwhile, the cryptocurrency fear and greed index fell to 24 points, although it reached 74 a week ago. The current value signals “extreme fear” in the market.

Santiment noted that the decline of the leading cryptocurrency occurred in sync with the stock market. During periods of turbulence, traders often turn to tangible assets like silver or gold. Precious metals continued to rise.

“Cryptocurrencies like Bitcoin are not immune to macro-political upheavals. Although many view them as alternative or fringe assets, they remain highly sensitive to risk appetite. Like it or not, Bitcoin behaves more like a risk asset than a safe haven during times of national tension,” analysts concluded.

When Will Growth Resume?

The cryptocurrency market’s decline may actually signify an early stage of a bull trend, believes crypto trader Alex Becker.

In his view, the sharp correction was partly driven by “unprecedented impatience” among investors in recent weeks.

“I think selling now is perhaps the dumbest thing you can do,” he noted.

Crypto analyst Benjamin Cowen also optimistically assessed Bitcoin’s prospects, pointing out that digital gold has regained dominance to 60%.

Large liquidation cascade yesterday sent #BTC dominance soaring above 60%.

I still think in the short-term it continues to climb https://t.co/xmxP5ZWEo7 pic.twitter.com/JCZ0O6OztN

— Benjamin Cowen (@intocryptoverse) October 11, 2025

 “It’s time for the next phase of Bitcoin’s growth,” — stated Jan3 founder and CEO Samson Mow.

Economist Timothy Peterson cautiously suggested in a comment for Cointelegraph that cryptocurrency might enter a “cooling period.” Digital gold will continue its upward movement in three to four weeks.

“But perhaps at a slower pace than before,” he added.

As reported by CryptoQuant, Bitcoin retains growth potential. Trader Peter Brandt identified a target of $185,000 as a prospect. Analyst Frank Fetter believes the overbought zone for the leading cryptocurrency will occur around $180,000.