A pseudonymous crypto analyst, widely recognized for accurately predicting the 2022 market collapse, has issued a new warning to investors. The analyst, known as “Capo of Crypto,” stated that the recent sharp downturn in digital asset prices may only be the beginning of a more significant correction, potentially leading to a “black swan” event.
The market turmoil follows former President Donald Trump's announcement of 100% tariffs on Chinese goods, which triggered a severe sell-off across risk assets. The subsequent crash liquidated over $19 billion in leveraged crypto positions, one of the largest such events on record.
Key Takeaways
- An analyst who predicted the 2022 crypto crash warns that the recent market decline is a precursor to a larger event.
- The market downturn was triggered by a political announcement regarding 100% tariffs on Chinese goods, causing widespread investor panic.
- Over $19.3 billion in leveraged crypto positions were liquidated in 24 hours, affecting nearly 1.7 million traders.
- The analyst suggests Bitcoin could fall to a $60,000 to $70,000 range before establishing a stable bottom.
Macro Shock Triggers Widespread Sell-Off
The digital asset market experienced extreme volatility following an announcement from Donald Trump on October 10 regarding new trade policies. In a post on the Truth Social platform, Trump detailed plans to impose 100% tariffs on virtually all products from China, effective November 1, 2025.
The statement cited what was described as an "extremely hostile letter" from China regarding trade. This unexpected geopolitical development prompted an immediate flight from assets perceived as high-risk, including cryptocurrencies and equities, as investors moved capital into safer havens like the U.S. dollar.
In the hours that followed, the market reacted violently. Bitcoin's price briefly dropped to $102,000 on some futures exchanges and fell below $110,000 in spot markets. The impact on alternative cryptocurrencies, or altcoins, was even more severe.
Major digital assets saw significant double-digit losses:
- Ethereum (ETH)
- Solana (SOL)
- XRP
- Dogecoin (DOGE)
These assets plunged between 15% and 30%, erasing billions in market value within a short period. The rapid price decline was amplified by a cascade of forced liquidations from traders using borrowed funds.
Why Tariffs Impact Crypto Markets
Announcements of significant tariffs create economic uncertainty. Investors worry about higher consumer costs, disrupted supply chains, and slower global economic growth. In such an environment, market participants tend to reduce their exposure to volatile assets like cryptocurrencies and shift to more stable investments, a behavior known as a "risk-off" move.
Record Liquidations Erase Billions
The speed and severity of the crash triggered one of the largest liquidation events in the history of cryptocurrency markets. According to data from CoinGlass, the 24-hour period saw a staggering $19.3 billion in crypto positions wiped out.
This massive deleveraging event impacted approximately 1.67 million individual traders. The data reveals that the vast majority of those affected were betting on rising prices. Over 85% of the total liquidations were long positions, primarily in Bitcoin and Ethereum.
Market Carnage by the Numbers
- Total Liquidations: $19.3 billion
- Traders Affected: 1.67 million
- Long Position Losses: Over 85% of the total
- Primary Assets: Bitcoin (BTC) and Ethereum (ETH) led the losses.
These forced sales create a downward spiral. As prices fall, leveraged traders are forced to sell their holdings to cover their debts, which adds more selling pressure to the market and pushes prices down even further and faster.
Analyst Warns of a Pre–Black Swan Event
In a market note published on October 11, the analyst “Capo of Crypto” framed the recent crash not as the main event, but as a precursor. He described the sell-off as a “pre–Black Swan event,” suggesting that underlying weaknesses in the market have not been fully resolved.
"Altcoins have suffered historic capitulation, yet several majors still haven’t fully flushed," Capo stated. He argued that while the initial shock was severe, more downside potential remains before a true market bottom is formed.
The analyst pointed to Bitcoin's price as a key indicator. He noted that while Bitcoin remains above $100,000, this level is “far from the $60,000 to $70,000 area that would align with a complete correction.” This implies that significant further declines could be necessary to reset the market for a sustainable recovery.
Capo also suggested that the low prices seen during the flash crash could be revisited. He believes the sharp downward wicks on price charts “should eventually be filled” as traditional markets fully process the implications of the new tariff policies.
What is a Black Swan Event?
In finance, a "black swan" is an unpredictable and rare event that has severe, widespread consequences. These events are often rationalized in hindsight but are impossible to foresee. Examples include the 2008 global financial crisis, the COVID-19 market crash in 2020, and the collapse of the FTX exchange in 2022.
Analyst's Credibility and Market Outlook
“Capo of Crypto” gained a significant following among retail traders due to his accurate bearish predictions during the 2022 market downturn. His credibility was solidified during the collapse of FTX, when he publicly forecasted that Bitcoin would capitulate into the $13,000 to $14,000 range.
He also warned of a final, sharp drop in altcoins at the time, both of which came to pass. This track record has led many investors to pay close attention to his current analysis.
Looking ahead, Capo anticipates a temporary lull in market activity. He expects a “brief consolidation over the weekend,” which could be followed by “more downside” as institutional liquidity returns to the market in the following week.
He also highlighted potential “structural cracks” in traditional financial markets that could lead to “short-lived global disruptions that shake confidence in core systems.” Such a scenario, he noted, could act as a “reset before the next phase begins.”
Market Status After the Crash
By the morning of October 11, the crypto market had found some temporary stability. The total cryptocurrency market capitalization stood at approximately $3.86 trillion, a modest recovery from the intraday lows but still reflecting a significant 24-hour decline.
Bitcoin managed to reclaim a position in the low $110,000s, while Ether stabilized in the mid-$3,800 range. However, the market sentiment remains fragile as investors await further developments on the geopolitical and macroeconomic fronts.
