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Welcome back to Lightspeed. Today’s edition is brought to you by the 0xResearch newsletter’s Shaunda Devens. He unpacks Friday’s session, which saw one of the sharpest resets in months.

Median perpetual drawdowns reached −66%, with total liquidations exceeding $6.7 billion on Hyperliquid alone. Despite the scale of the move, assets have since rebounded strongly, recovering a median +129% from crash lows while remaining −17.5% below pre-crash levels.

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Markets mayhem?

All major indices were hit hard on Friday, resulting in a major loss of open interest and positions. Global open interest fell from $91 billion to $57 billion. Excluding BTC, altcoin open interest nearly halved, dropping from $37 billion to $19 billion.

On Binance, the median max drawdown across assets was −64%, with major tokens such as SUI and TIA seeing declines of over 80%. The correlated move was a result of market liquidity stress, leading to synchronized liquidations across assets. Only 86 assets (13%) limited their losses to under 20%, with TRX among the strongest performers.

Despite the severity of the drop, altcoins have shown strong recoveries, similar to BTC. On average, assets have rebounded 85% from their crash lows, with 56 assets (8.5%) already surpassing pre-crash levels. However, the majority of assets, 457 (69%), remain below 90% of their pre-crash values, indicating continued market caution.

Among the strongest recoveries, ZEREBRO stands out, now trading at 272.9% of its pre-crash value. BAS has also ripped back, keeping the BNB season narrative very much alive. Strangely, SNX is up 189.9%, after Degenping (who ominously predicted a 10/10 bid) started bullposting the token. Such rebounds, especially after a market-wide correction, are healthy indicators that weak positions (over-margined or short-term) have been flushed out and new buyers have stepped in, ready to take on risk, and could expect to lead the market.

Overall, most assets have recovered, with only 36 trading below 70% of their pre-crash levels. Interestingly, XPL ranks among the 10 worst performers following the drop, trading at 42% of its pre-crash value vs. a median of 85%. This likely comes from its heavy incentive emissions to support USDT liquidity, with the longer-term neobank narrative forcing short-term holders who used XPL as a USDT proxy to puke positions.

Nonetheless, the broader market has shown strong resilience: The median recovery from crash lows stands at +129%, while the median position relative to pre-crash levels is −17.5%. For those under-allocated, now might be a good time to pick up discounted tokens that reacted to a tariff threat that has now seemingly been walked back. For those struggling, it’s a good moment to reassess positioning and rotate back into winners.

— Shaunda Devens

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