When Stocks Sleep, Crypto Reacts: How the 10.10 Liquidation Event Revealed the Weekend Crypto-Stock Effect
In the digital assets world, markets never rest but traditional stock markets do.
A new study on the “weekend effect” suggest that negative weekend cryptocurrency returns significantly predict Monday equity declines.
Now, the massive $19 billion+ liquidation event on October 10, 2025 (“10.10”) offers a real-world case that illustrates how the crypto-stock weekend effect operates.
What the Research Shows
The academic paper found that when cryptocurrencies experience negative returns or high volatility over the weekend, this often signals weaker stock returns when Monday rolls around. The logic: crypto markets operate 24/7, so risk-appetite shifts that occur over the weekend may not show up in stocks until the next trading day.
10.10 Crypto Crash: The Weekend Trigger
On Oct 10–11 2025, cryptocurrencies suffered one of their worst weekends ever — more than $19 billion in leveraged positions liquidated.
A key trigger: a surprise announcement by Donald Trump of a 100% tariff on Chinese imports, re-igniting global risk-off sentiment.
Bitcoin plunged over 14 % in a matter of hours, altcoins collapsed 40–70 %.
The crash mainly unfolded on a weekend, when global stock markets were closed or illiquid, but crypto did not pause.
How It Mirrors the Weekend Effect
Crypto turbulence over a non-stock trading interval: because it happened during a weekend (or weekend-adjacent hours), crypto’s bleeding occurred before stocks reopened.
Weak crypto returns + volatility = warning signal: The 10.10 event checks both boxes: extreme volatility, sharp negative returns in crypto.
Stocks react after the weekend: When Monday arrives, stocks may reflect the risk-appetite shift already registered by crypto. In this case, stocks were poised for stress given the prior weekend meltdown.
Leverage and interconnectedness: The event showed how crypto’s internal structures (liquidations, order-book depth) amplify risk and reveal broader market fragility, which can bleed into equities.
What Investors and Traders Should Watch
Monitor weekend crypto performance: If crypto drops sharply or sees high volatility on the weekend, consider early‐week caution for stocks.
Check for leverage / derivative imbalances: 10.10 was driven by leveraged positions and forced liquidations and risk tends to cascade.
Be aware of macro / trade catalysts: The October crash was triggered by geopolitical news. Such catalysts often function as weekend surprises.
Use crypto as a risk gauge: Because crypto doesn’t sleep, its weekend action may act as a proxy for negative sentiment that stocks will price in on Monday.
Implications for Risk Management
The research paper’s empirical foundation includes data surrounding the 2022 Terra-LUNA collapse, one of the most significant crashes in crypto history. The authors found that the extreme weekend volatility and cascading liquidations during that episode served as a stress test for understanding how shocks in the crypto market can spill over into traditional finance.
By analysing post-LUNA data, the researchers demonstrated that when cryptocurrencies experience deep losses or volatility spikes over a weekend, Monday stock returns often respond negatively. The study concluded that weekend crypto movements carry measurable information about investor sentiment and cross-market risk appetite.
The more recent 10.10 liquidation event reinforces these findings in real time. It further proves that digital assets are no longer isolated; their weekend dynamics now echo across global markets. For portfolio managers and traders, the lesson is clear:
Monitor weekend crypto signals as early indicators of Monday equity sentiment.
Incorporate those signals into hedging, exposure, and liquidity planning.
Treat crypto as an integral component of inter-market risk management, not a parallel system.
Conclusion
The 10.10 crypto crash provides a contemporary, real-world illustration of the crypto-stock weekend effect first identified through the LUNA 2022 data. In both cases, massive losses and liquidations unfolded while equity markets were closed — and when they reopened, traditional assets reflected the same risk-off sentiment.
These episodes collectively show that crypto markets, operating 24/7, now act as a continuous sentiment barometer for global finance. Weekend volatility in digital assets is slowly becoming a strong signal.
For investors, risk managers, and policymakers alike, the message is unmistakable:
When crypto bleeds while stocks sleep, the shock rarely stays contained.
Monday’s markets may only be waking up to what crypto already knows.
