Crypto Sees Massive Liquidations: $7.5B Gone in One Hour

The cryptocurrency market was thrown into chaos on Friday, October 10, 2025, as a staggering $7.5 billion worth of leveraged positions were liquidated within a single hour. This dramatic event, confirmed by analyses from Bloomberg and FXStreet, underscores the extreme volatility inherent in the digital asset space and the fragility of high-leverage trading.

Macroeconomic Tensions Ignite Sell-off

The cascade of liquidations followed a significant pullback from Bitcoin’s recent surge to all-time highs. However, the immediate trigger for Friday’s convulsion was a broader “risk-off” sentiment fueled by renewed macroeconomic stress. Specifically, threats of new tariffs between the United States and China injected uncertainty into global markets, prompting investors to shed riskier assets.

According to experts, the scale of the liquidation event was of epic proportions. Over the past 24 hours surrounding the flash crash, more than 1.6 million traders faced liquidations, with total losses reaching an estimated $19.13 billion across crypto derivatives markets. This forced unwinding was exacerbated by factors such as high concentration of leverage in perpetual futures, declining market liquidity, and cascading stop orders that triggered further sell-offs.

Widespread Market Impact

The fallout was immediate and severe across the crypto landscape:

• Price Collapse: Bitcoin experienced a sharp reversal, plummeting below the $110,000 mark. Major altcoins, including Ethereum, also saw double-digit percentage declines within hours, reflecting the widespread panic.
• Forced Unwind Pressure: The liquidation of leveraged positions created a powerful feedback loop, as margin calls forced more traders to sell, intensifying the downward price pressure.
• Capital Flight: In a flight to safety, investors reallocated capital into traditional safe havens like gold and government treasuries, as well as more stable digital assets such as stablecoins, to mitigate further losses.
• Persistent Volatility: The event pushed realized volatility to extreme levels, a condition that can become self-reinforcing and prolong choppy, unpredictable trading conditions.

Should Investors Worry?

As the cryptocurrency world digests this record-breaking liquidation event, market participants and investors are now on high alert. The key questions that are worrying all stakeholders include:

• Technical Support: Can critical support levels hold under continued pressure, or are fresh lows imminent?
• Derivatives Metrics: Will tracking leverage ratios, funding rates, and open interest in derivatives markets offer clues to potential further downside or prospects for a rebound?
• Macro Policy Shocks: How will any further escalation in geopolitical or trade tensions impact market sentiment and price stability?
• Institutional Behavior: Will institutional capital return to the market, or will risk aversion prevail, leading to a prolonged period of cautious investment?

This liquidation event serves as a stark reminder of the inherent risks in highly leveraged crypto trading, particularly when coupled with broader macroeconomic uncertainty. The coming days will be crucial in determining whether this marks a temporary correction or a more significant deleveraging and reset for the volatile digital asset market.

Weakness in the crypto market had already been present coming into Friday. Over the past 24 hours, bets worth some US$9 billion in bets on cryptoassets have been wiped out, including US$7.5 billion in long positions and US$1.5 billion in shorts in the largest liquidation wave since at least early April.