How cryptocurrency traders are positioning themselves after the ‘Black Friday’ crash

The cryptocurrency market is going through the aftermath of a historic sell-off event, and one options expert noted a dramatic shift in traders’ sentiment and strategy.

Approximately $20 billion in positions were wiped out last Friday when Bitcoin plunged 17% in a matter of hours. The sell-off, now dubbed “Black Friday,” came after President Trump announced a 100% tariff on all Chinese goods in response to Beijing’s restriction on rare mineral exports, Decipher previously reported.

The shock wave also affected traditional markets, causing the S&P 500 to fall 3.37% to its 29-day low.

“Friday’s crash was the most dramatic in cryptocurrency history, with nearly $19 billion in liquidations across the market,” said Sean Dawson, head of research at on-chain options platform Derive. Decipher.

“What we saw was a classic cascade effect, panic selling in weak markets compounded by the sudden evaporation of liquidity as market makers pulled quotes to manage risk,” he added.

He explained that once that liquidity disappeared, each forced sale had a huge impact, causing more liquidations and accelerating the crisis, Dawson explained.

“Volatility has increased across all maturities, not just short-term options,” Dawson explained. It indicates that the market is preparing for a prolonged period of instability, not just a short-lived shock.

He noted that traders are moving out of upside exposure into downside protection, a shift reflected in a downward bias that shows investors are heavily favoring puts, with notable interest in downside strikes at $115,000 and $95,000 for Bitcoin and $4,000 and $3,600 for Ethereum.

What’s next?

Bitcoin is up 4.4% in the last 24 hours, with Bittensor’s 42% gain leading the rally among the top 50 altcoins, per CoinGecko data.

While the cryptocurrency rally this weekend is encouraging, “it is masking deeper structural risks,” said Marco Lim, managing director of Solowin Holdings and founding partner of MaiCapital. Decipher.

“My concern is not the tariffs, but the systemic fragility around WBETH and Binance’s liquidity dominance,” Lim said.

He noted that “a 10% move in Bitcoin has already stressed Ethereum’s shrouded liquidity,” suggesting that “if Binance remains the single point of failure for stablecoin flows, we are one sharp correction away from a cascading decline.”

Decipher He reached out to Binance for a comment on WBETH liquidity concerns but did not receive an immediate response.

Dawson echoed, noting that the bounce “doesn’t mean the danger has passed. This feels more like a recalibration, a pause before the next move.”

While near-term demand remains bearish, the data showed higher call demand on the 30+ day horizon, suggesting some traders expect an eventual recovery later in the quarter.

While volatility is likely to remain elevated, Dawson warned that as the market regains liquidity and confidence, traders remain on the defensive, at least until macroeconomic risk subsides.