Major cryptocurrencies including Bitcoin, Ether, XRP, and Solana fell sharply on October 16, 2025, as tightening liquidity in the US financial system curbed risk appetite. Bitcoin dropped below $109,000 to around $108,800, while altcoins saw steeper declines of up to 13%. The sell-off follows a weekend wipeout of about $500 billion in market value.
The cryptocurrency market continued its downward spiral on Thursday, October 16, 2025, with Bitcoin tumbling 2% in the past hour to $108,800, having mostly erased gains from the previous week's leverage flush. Ether fell to $3,918.73, XRP to $2.3345, and Solana to $185.76, each down roughly 3% over the last 60 minutes. This extends losses from a weekend crash that erased approximately $500 billion in total market capitalization, bringing it to $3.88 trillion, a 1.4% drop from recent levels.
Key indicators point to tightening liquidity as the primary catalyst. The spread between the secured overnight financing rate (SOFR) and the effective federal funds rate (EFFR) widened to 0.19 from 0.02 in one week, the highest since December 2024. SOFR, a nearly risk-free rate for overnight borrowing backed by US Treasuries, rising above the uncollateralized EFFR signals higher borrowing costs and funding stress. Banks drew $6.75 billion from the Federal Reserve's standing repo facility on Wednesday, the largest amount since the end of the coronavirus pandemic, excluding quarter-end periods.
Altcoins bore the brunt, with TAO, ASTER, and LDO declining 12-13% in 24 hours. Derivatives data reflects caution: Bitcoin futures open interest held at $25 billion, but funding rates turned negative at -2% to -3% on Binance and OKX, indicating bearish positioning. Liquidations totaled $415 million in 24 hours, mostly longs. Meanwhile, precious metals contrasted the trend, with gold up 2% to a record below $4,300 per ounce and silver up 3.6% to a new high.
Some sources attribute additional pressure to a US-China trade scare and profit-taking after the market cap hit $4.27 trillion earlier, though liquidity metrics dominate recent analysis. The SOFR-EFFR spread remains far below the 2019 repo crisis peak of 2.95, but ongoing stress has sparked speculation of central bank intervention to ease conditions and potentially revive crypto rallies.
