The Night That Broke the Market
On Oct. 10, 2025, President Trump announced a 100% tariff on Chinese imports and what followed was the largest liquidation event crypto has ever recorded, with over $19 billion in leveraged positions forcibly closed and more than 1.6 million trading accounts liquidated.
To elaborate, roughly 70% of the damage, about $6.93 billion, hit in a 40-minute window, and $3.21 billion was liquidated in a single minute at 21:15 UTC. Subsequently, bitcoin fell from $122,574 to $104,782 and the ethena stablecoin (USDe) briefly traded at $0.65, with Binance later paying out over $283 million to affected users.
- $16.7 billion of the losses were longs, and that total perpetual futures open interest collapsed 43% in a day, from $217 billion to $123 billion.
- Some market makers believe the true total was closer to $30 billion to $40 billion, since not every venue reports in full.
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The cleanest way to measure the year is side by side:
- Record high: $126,080 on Oct. 6, 2025, while today bitcoin’s price is about $82,700.
- Market cap: About $2.43 trillion on Oct. 10, 2025, but has lost about $738 billion lost since, now standing at roughly $1.66 trillion.
- Liquidations: $19 billion in one night then. This week, however, witnessed a $1.1 billion day on Oct. 8 that cooled to $228 million by Friday.
- Exchange-traded funds (ETFs): Spot bitcoin ETFs now hold a big share of the market, and this week they shed over $700 million, with two-day outflows near $1 billion.
Simply put, bitcoin’s price never reclaimed the high it set four days before the crash. Every rally since has run into the memory of what leverage did that night.
Leverage Is Still the Story
The crash did not end leverage; it just changed its timing and there have been repeat episodes in 2026, including a Jan. 20 flush and a Feb. 1 “Black Sunday II” that erased about $2.2 billion in positions within 24 hours.
This week’s slide to a month-to-date low of $80,308, followed by a bounce back to $83K, was smaller but followed the same pattern, i.e. crowded longs got liquidated first, then shorts got squeezed.
The positioning now seems to be headed in the opposite direction, with onchain trackers flagging about $3.3B in bitcoin shorts that face liquidation up to $85,000. If bitcoin pushes through that zone, forced buying could do to the bears what Oct. 10 did to the bulls, just on a smaller scale.
In any case, the lesson from Oct. 10 is less about the tariff that triggered it and more about the leverage it exposed. The market today is smaller, and the leverage hasn’t gone away.
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