In the fast-paced world of crypto, market shakes like the recent spike in liquidations can feel like a gut punch, especially if you're holding leveraged positions. But according to a recent thread on X (formerly Twitter) from @Altcoinist_com, this could actually be a bullish signal, akin to buying the dip after a VIX spike in stocks. For meme coin enthusiasts, this might just be the setup for the next leg up.

Liquidations happen when traders using leverage—basically borrowing money to amplify their bets—get forced out of their positions because the market moves against them. Think of it as the exchange automatically selling your assets to cover losses. The chart below from CoinGlass shows a massive uptick in long liquidations (bets on prices going up), marking one of the biggest wipeouts of 2025 so far.

The original post quotes analyst @Wamooso, who points out that half of the "10x degen squad"—those high-risk, high-reward traders chasing massive gains—got liquidated. Yet, he sees this as healthy for the long-term trend. No need to panic unless you were over-leveraged at the top.

Diving deeper, the focus is on key market indicators like $TOTAL2, which is the total crypto market cap excluding Bitcoin. It's on its fourth attempt to break a multi-year resistance level, with a target of 2.5–3 trillion by year's end. The current choppiness? Just noise before a potential breakout.

Bitcoin itself ($BTC) broke a "trap line" and looks weak short-term, possibly dipping to 104k. But these liquidations could fuel a bounce back toward 130–140k. Some coins, particularly on Binance Smart Chain (BSC)—a hotbed for meme tokens—are showing resilience. If you're sidelined, this might be a prime accumulation zone.

Then there's $OTHERS, the market cap excluding the top 10 cryptos, which often includes volatile meme coins. It broke some local trends but is still eyed for all-time highs. Patience is key here, as endless token dilution and hype cycles make this segment tricky.

The Bitcoin price chart reinforces this, with potential for an upside eclipse after the dip.

@Altcoinist_com draws a parallel to the stock market's VIX—the "fear index" that spikes during uncertainty, like the recent Tariff black swan event. Historically, buying the S&P 500 after such spikes has caught the bottom of the next rally. Applying this to crypto, the liquidation surge could signal it's time to ape in (crypto slang for jumping into a trade aggressively).

For meme token holders, this is particularly relevant. Memes thrive on volatility and community hype, but they're also the first to get hammered in liquidations due to their speculative nature. However, these washes often clear out weak hands, setting the stage for stronger pumps. With October historically being Bitcoin's best month (100% green closes), the cooling period might precede a meme coin frenzy.

Stay selective, though—pick entries wisely and avoid max leverage. As always, this isn't financial advice, but keeping an eye on these charts could help you navigate the meme madness ahead.

For more insights on meme tokens and blockchain trends, check out our knowledge base at Meme Insider.