Citing BlockTempo, Fundstrat co-founder Tom Lee revealed on CNBC that the recent Bitcoin slump is primarily due to liquidity exhaustion caused by the October 11 flash crash. He explained that market makers suffered losses of up to $19–20 billion, forcing them to sell assets to plug balance sheet gaps, which further exacerbated the liquidity crunch. Order book depth dropped by 98%, creating a self-reinforcing cycle of forced liquidations and price suppression. Lee noted that market makers, acting as de facto central banks in crypto, are now in the sixth week of recovery, rebuilding buffers through deleveraging and capital injections. BitMine Immersion Technologies has already begun accumulating Ethereum during the downturn, signaling confidence in a liquidity-driven rebound.
Tom Lee Claims 10/11 Flash Crash Triggered Liquidity Drought, Market Awaits Recovery
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