The historic crypto market crash on Friday — which erased nearly $20 billion in leveraged positions and sent some altcoins plunging over 95% in a single day — may not spell long-term trouble for digital assets, according to analysts at The Kobeissi Letter.

In a market note shared on Saturday, the analysts described the event as a “perfect storm” of short-term pressures, including excessive leverage, thin liquidity, and a politically charged shockwave from U.S. President Donald Trump’s announcement of 100% tariffs on all Chinese imports.

“We believe this crash was due to the combination of multiple sudden technical factors. It does not have long-term fundamental implications,” the Kobeissi Letter analysts wrote.
“A technical correction was overdue; we think a trade deal will eventually be reached, and crypto remains fundamentally strong. We remain bullish.”

Source: The Kobeissi Letter

According to data from CoinGlass, roughly $16.7 billion in long positions were liquidated compared to $2.5 billion in shorts — a nearly 7:1 ratio that highlights how overleveraged bullish traders were caught off guard.

The analysts also noted that the tariff announcement was made late Friday afternoon — a time when liquidity across crypto exchanges is historically thin — creating ideal conditions for cascading liquidations and flash crashes.

The selloff, which some have dubbed “Crypto’s Black Friday,” was the largest single-day liquidation event in the market’s history, surpassing even the collapses of FTX and Terra/LUNA in scale and speed. Nearly 1.6 million traders saw their positions wiped out within 24 hours.

Analysts Expect Near-Term Volatility, Long-Term Strength

Despite the chaos, industry experts are cautioning against panic. Cory Klippsten, CEO of Swan Bitcoin, said Bitcoin’s long-term trajectory remains intact and that the current correction will likely “flush out” overleveraged positions and pave the way for a healthier market.

“This is the kind of reset that washes out weak hands,” Klippsten told Cointelegraph. “Once the leverage is cleared and the dust settles, Bitcoin and major assets tend to consolidate and prepare for the next rally to new highs.”

Other traders echoed similar sentiments, warning that the real financial damage may extend beyond the reported $20 billion in liquidations, as cascading margin calls and off-exchange losses often take days to surface.

The Total3 crypto market cap, representing the crypto market cap without Bitcoin or Ethereum, fell from $1.15 trillion to about $766 billion in a single day. Source: TradingView

Still, the broader outlook remains optimistic. The Kobeissi Letter emphasized that crypto’s fundamental drivers — institutional adoption, ETF inflows, and network growth — remain strong, and that “macro shocks don’t alter the long-term digital asset narrative.”

Market Outlook

As of press time, Bitcoin (BTC) trades around $111,700, while Ether (ETH) hovers near $3,800, both recovering modestly after Friday’s carnage. Analysts say volatility will likely remain elevated in the short term, but most agree that the latest crash was a technical correction, not the start of a new bear market.