Cardano and Dogecoin Lead Cryptocurrency Recovery After ‘Emotional’ $19B Reset
Following a tumultuous weekend for Bitcoin (BTC) traders, the market saw a significant rebound after an “emotional” $19 billion reset caused by a flash crash triggered by the announcement of a 100% tariff on Chinese imports by former President Trump. This event marked the largest single-day liquidation in crypto history, with nearly $19 billion wiped from various cryptocurrency positions. However, within 48 hours, the market appeared more stable as tensions between Washington and Beijing began to ease.
During this rebound, alternative cryptocurrencies like cardano (ADA) and dogecoin (DOGE) emerged as leaders, witnessing gains of nearly 10% in just 24 hours due to their attractively discounted valuations drawing in bargain hunters. Alongside these, Bitcoin (BTC) experienced a 2.7% increase over 24 hours, reaching approximately $114,665, while ether (ETH) surged by 8.3% to $4,135. BNB recorded a gain of 13.9%, highlighting the return of liquidity toward ecosystem tokens. Additionally, XRP rose by 7.4%, and Solana (SOL) added 7.2% to the mix.
Despite the intense market volatility, the overall bullish trend seems to remain intact, with sentiment being reset following the recent events. According to Justin d’Anethan, head of partnerships at Arctic Digital, “What we just saw was a massive emotional reset.” This volatility, while punishing for traders on the way down, has also brought clear indicators that the longer-term market structure remains robust. Factors like strong ETF inflows, exchange balances nearing cycle lows, and a strengthened broader narrative post-washout all contribute to this sentiment.
The impact of the liquidation event was not inconsequential, with over 6,300 wallets being liquidated on Hyperliquid alone, resulting in significant losses for some traders. The cascade triggered by Auto-Deleveraging, a circuit-breaker mechanism that closes winning positions to cover systemic losses when insurance funds are exhausted, both prevented bad debt and exacerbated the fall, transforming the correction into a more structural event.
As tensions between the U.S. and China began to ease over the weekend, indicated by the clarification from China’s Ministry of Commerce that export controls on rare-earth minerals would not be a blanket ban and Trump’s statement expressing intentions to assist China, market sentiments improved accordingly. It appears that the crypto market is once again aligning with macroeconomic factors, with sentiments indicating a potential recovery towards all-time highs if the U.S.-China trade situation does not escalate further.
Looking ahead, the market’s direction will largely depend on interest rates and risk appetite. Should central banks move towards easing, traders anticipate that assets like ETH and yield-generating tokens may outperform others. Key indicators such as funding rates, options skew, and whale flows will provide insights into where fresh capital may flow next. While the market setup remains volatile, the underlying belief seems to be undeterred, with the recent shakeout primarily impacting leverage rather than belief in the market’s overall direction.
