Deribit’s Lin Chen Predicts Crypto Market Rally Post-Liquidity Crash

Deribit’s Asia-Pacific Business Director Lin Chen highlighted on X that post-‘1011’ crash liquidity remains 15%-20% lower, amidst U.S. stock market volatility and a potential year-end rally.

The ongoing liquidity constraints impact crypto assets like Bitcoin and Ethereum, as funds migrate, challenging near-term rally prospects amid high volatility.

Deribit Reports 20% Liquidity Drop After “1011” Incident

Lin Chen of Deribit, a leading crypto derivatives exchange, stated market liquidity remains 15%-20% lower than before the “1011” crash. This follows a period of market turmoil prompted by U.S. stock market volatility and earnings season fluctuations.

In the current environment, liquidity drain has chiefly affected the BTC options market, a sector where Deribit holds significant influence. Chen predicts market stabilization as U.S. stock conditions improve, suggesting the potential for a year-end crypto rally.

“The current market liquidity is still 15%-20% lower compared to before the ‘1011’ crash. The U.S. stock market is experiencing a volatile earnings season, so most of the funds have been drained away. Fortunately, the U.S. stock market is still hitting new highs. As long as the U.S. stock market remains stable, when liquidity spreads over, I think there will still be a year-end market rally; but it’s difficult to rally in the near term, and the volatility is also high.”

Historical Context: U.S. Market Stability Key to Crypto Recovery

Did you know? Major occurrences like the post-FOMC volatility have historically led to short-lived liquidity drops, often seeing subsequent recovery phases linked to traditional market stabilization.

As of November 2, 2025, Bitcoin (BTC) is valued at $110,503.87 with a market cap of approximately $2.20 trillion and a dominance of 59.44%. Recent price trends show a 24-hour increase of 0.36% but a weekly decrease of 1.78%, according to CoinMarketCap.

Experts suggest continued liquidity challenges could affect market recovery, though historical data indicates a potential rally if traditional market stability persists. Investors are advised to stay informed on regulatory developments and evolving market structures.