Crypto Carnage: $19.5 Billion Evaporates in Historic Market Meltdown
Digital assets face unprecedented liquidation storm as leverage positions collapse across major exchanges.
The Great Unwind
Margin calls hit record levels as cascading liquidations trigger the largest single-day capital destruction in crypto history. Trading platforms scramble to manage the fallout while investors watch portfolios vaporize in real-time.
Market Mechanics Exposed
High-leverage positions crumbled under pressure, creating a domino effect that wiped out $19.5 billion in open interest. The bloodbath spread across Bitcoin, Ethereum, and altcoins alike—no safe havens emerged during the rout.
Institutional Impact
Hedge funds and retail traders alike got caught in the crossfire. Some Wall Street veterans are probably sipping martinis while watching the carnage from their penthouse suites—because nothing says 'risk management' like other people's money disappearing.
Recovery Prospects
Market makers step in as volatility hits extreme levels. The question remains whether this represents a healthy correction or the beginning of something more sinister. Either way, the crypto ecosystem just got its most brutal stress test yet.
Liquidations Ripple Through Entire Crypto Market
The most recent crypto market crash took many crypto investors by surprise. Notably, data shared by The Kobeissi Letter on the social media platform X revealed that a total of $19.5 billion was liquidated between October 10 and 11, 2025, over nine times larger than any prior event. To put that into context, the February 2025 liquidation event saw only $2.2 billion erased, while the May 2021 crash cleared $1.2 billion.
Data across major exchanges confirmed that the sell-off was heavily one-sided. Out of the $19.38 billion in total liquidations, $16.7 billion came from long positions, which is a 6.7-to-1 ratio compared to shorts. Nearly every exchange, from Binance to Bybit, saw over 90% of liquidations hitting longs, with Hyperliquid alone recording $10.3 billion.
Crypto Exchange Liquidations. Source: @KobeissiLetter on X
This quick downturn is quite notable, considering the crypto market’s greed index had climbed above 60 when Bitcoin’s price action broke above $126,000 for the first time.
Crypto Fear and Greed Index. Source: @KobeissiLetter on X
What Caused The Crash?
The reason behind the crash can be attributed to a mix of extended market corrections following Bitcoin’s all-time high and rising tensions over new US tariffs on China. According to The Kobeissi Letter, the selloff unfolded through a series of perfectly timed events that tied geopolitical shocks to fragile market sentiment.
At 9:40 AM ET, some large Bitcoin holders began selling off mysteriously, more than an hour before former U.S. President Donald Trump posted about a massive China tariff threat at 10:57 AM. Later in the day, at 4:30 PM, a large whale opened multi-million-dollar shorts, seemingly anticipating the coming drop. Just 20 minutes later, Trump officially announced a 100% tariff on China, and this delivered the final blow to bullish sentiment.
Timeline Of Events. Source: @KobeissiLetter on X
Trump’s tariff post dropped late on a Friday after US markets had closed, but the crypto market was wide open. As such, crypto prices fell into a vacuum as volume spiked, creating the perfect setup for one of the fastest collapses in crypto history. By 5:20 PM, total liquidations had reached $19.5 billion, and the whale closed positions for a $192 million profit.
Despite the carnage, The Kobeissi Letter noted that this event was technical rather than fundamental. The crash is a necessary reset that does not have long-term implications. A trade deal between the US and China WOULD put an end to the uncertainty, and according to the team, crypto remains strong.
Bitcoin Price Chart. Source: @KobeissiLetter on X
At the time of writing, bitcoin has recovered a bit from its plunge and is now trading at $111,790.
Featured image from Unsplash, chart from TradingView
