It was a week that shook the cryptocurrency world to its core. On October 10, 2025, U.S. President Donald Trump announced a sweeping 100% tariff hike on Chinese goods, coupled with a threat to cancel a highly anticipated meeting with Chinese President Xi Jinping. According to Thanh Nien, this bombshell sent shockwaves through global financial markets, and nowhere did the tremors hit harder than in the digital asset space.
The fallout was swift and severe. In the early hours of October 11, Bitcoin’s price—already teetering from earlier trade war threats—plummeted from around $116,000 to $104,000, briefly touching lows near $102,000. This marked its lowest point since June, when the world’s leading cryptocurrency dipped below the $100,000 threshold. The carnage didn’t stop there: Ethereum, the second largest cryptocurrency, tumbled 16% in 24 hours, briefly dipping below $3,700 before clawing back to $3,880. Binance Coin (BNB) wasn’t spared either, sliding 13% to roughly $1,000 after a string of bullish days.
As Crypto Chiefs reported, the market’s reaction was nothing short of a “liquidation frenzy.” In just 24 hours, a staggering $597.83 million in crypto positions were forcibly closed across major exchanges. Over 95% of these were long positions—traders betting on further price increases—caught off guard by the sudden reversal. The event was so dramatic that Crypto Chiefs described it as “an event for the ages,” noting, “This will be a memorable event! Crypto liquidations, accompanied by a live liquidation chart, show nearly half a billion USD liquidated in the past 24 hours, making this one of the biggest wipeouts of the year.”
But that’s only part of the story. According to CoinGlass data cited by Thanh Nien, the total value of liquidated positions across the market reached $9.4 billion, with $7.15 billion coming from traders who had bet on Bitcoin’s continued rise. These liquidations weren’t just numbers on a screen—they represented the forced closure of leveraged bets, often when investors lost part or all of their initial margin, unable to meet the maintenance requirements set by exchanges.
Leverage, the double-edged sword of crypto trading, was at the heart of the chaos. Some exchanges allow traders to borrow up to 125 times their own capital, amplifying both gains and losses. When prices swing violently—as they did following Trump’s tariff announcement—the risk of liquidation skyrockets. As Hyblock Capital analysts explained, “Global leverage has doubled, with most altcoins’ leveraged positions fully wiped out.”
The numbers behind the turmoil are staggering. In the first hour of the sell-off, total liquidations reached roughly $408 million, almost entirely from long positions. Four hours in, the figure rose to $471 million, again dominated by longs. This pattern, according to Crypto Chiefs, signaled a rapid and brutal price decline for leading assets like Bitcoin and Ethereum, with leveraged long traders bearing the brunt.
Short positions—bets that prices would fall—remained subdued for the first 12 hours, only to spike later in the day, suggesting a late-cycle flurry of short squeezes (when prices rebound, forcing short sellers to buy back in a panic). The long-to-short liquidation ratio, an indicator of market sentiment, started at a jaw-dropping 157:1 in favor of longs during the first hour, dropping to 27:1 over 24 hours. This shift hinted at a market in total disarray, as both bullish and bearish traders were caught off guard by the scale and speed of the moves.
Adding to the confusion, discrepancies appeared in liquidation data across reporting platforms. For instance, some aggregators showed total long liquidations exceeding the overall sum of liquidations—$620.73 million in longs versus $597.83 million in total liquidations—pointing to inconsistencies in how different exchanges reported and aggregated data. As Crypto Chiefs noted, “Data anomalies suggest differences between aggregators but confirm the overall scale.” Nevertheless, the consensus among analysts was clear: this was one of the largest and fastest liquidation episodes of 2025, rivaled only by the infamous $10 billion wipeout during the 2021 crash.
The ripple effects were felt across the broader crypto ecosystem. The total market capitalization of digital assets shrank by 10.76% in a single day, dropping from over $4.1 trillion to just $3.7 trillion. The CoinMarketCap 20 index, tracking the top cryptocurrencies, slumped 10.8%, reflecting widespread panic. The so-called “Crypto Fear & Greed” index, a gauge of investor sentiment, nosedived from 64 to 27 in less than 24 hours—a clear indicator of the collective anxiety gripping traders.
Decentralized finance (DeFi) platforms like Aave and MakerDAO, which allow users to borrow and lend assets on-chain, were put to the test. Despite the sudden volatility, these protocols managed to weather the storm, with their collateral pools remaining stable—a testament to the growing maturity of DeFi infrastructure. Still, the wave of liquidations sparked short-term panic selling, as overleveraged positions were unwound in a frenzy. As Crypto Chiefs observed, “Large-scale liquidations often signal a local volatility peak and market adjustment, rather than a prolonged downturn.”
Market observers were quick to draw comparisons to previous crises. Some likened the October 11 crash to the infamous March 2020 collapse triggered by the onset of the COVID-19 pandemic. Bob Loukas, a well-known trader, wrote on X, “A terrible crash. This deserves to be one of the most terrifying shocks in crypto history.” Ram Ahluwalia, founder of Lumida Wealth, added, “A brutal day. Trump’s news combined with panic selling led to a sharp market collapse.” Another prominent trader, Pentoshi, declared, “I know there are a lot of emotions right now, this sell-off is in the top three most classic of all time,” drawing parallels to the COVID-19 era. Zaheer Ebtikar, founder of Split Capital, summed up the mood: “We are at a level of devastation not seen in over a year regarding altcoins. Leverage has been completely reset and the market is in turmoil.”
Looking ahead, analysts warn that volatility may persist, especially if China retaliates against the new U.S. tariffs. The market’s collective nerves remain frayed, with many traders nursing heavy losses and a newfound wariness of leverage. For now, the October 2025 liquidation event stands as a sobering reminder of the risks lurking in the fast-moving world of crypto—and the speed at which fortunes can change.
