On October 10, 2025, the world of cryptocurrency was rocked by an unprecedented event: the largest one-day liquidation in its history. In just 24 hours, over $19 billion in leveraged crypto positions vanished, leaving 1.6 million traders liquidated and sending shockwaves through digital markets. Bitcoin, Ethereum, Solana, and other major coins tumbled sharply—an outcome that many analysts say was triggered by a potent cocktail of technical and geopolitical forces.
According to Reuters, the week leading up to the crash had been a banner period for crypto. Bitcoin reached a new all-time high above $125,000 on October 5, its eighth straight day of gains, buoyed by record inflows into crypto exchange-traded funds (ETFs) and a bullish equity backdrop. Over $5.95 billion poured into crypto ETFs in the week to October 4, with $3.55 billion directed toward Bitcoin and $1.48 billion into Ethereum products. Ether, too, soared—touching $4,879 by October 10, just above its previous record from 2021, as speculation over ETF demand and dovish signals from the Federal Reserve lifted sentiment.
Yet, the exuberance proved short-lived. As reported by Bloomberg and CoinGlass, the crypto market’s rally came to a screeching halt when U.S. President Donald Trump announced a 100% tariff on Chinese exports to the U.S., along with new technology export restrictions. This announcement, delivered after traditional markets closed, caught many off-guard and triggered a cascade of automated sell orders in a market already primed with excessive leverage. Liquidity was thin, and the resulting volatility was extreme.
"Crypto just saw its LARGEST liquidation event in history with 1.6 MILLION traders liquidated. Over $19 BILLION worth of leveraged crypto positions were liquidated in 24 hours, 9 TIMES the previous record," The Kobeissi Letter wrote on X, summing up the scale of the event. CoinGlass data confirmed the devastation: about $5 billion of Bitcoin, $4 billion of Ether, and $2 billion of Solana were liquidated within a single day. In total, liquidations reached $18.28 billion by mid-afternoon on October 10, a figure that would climb to over $19 billion by the day’s end.
The fallout was immediate and dramatic across the board. Bitcoin, which had started October near $118,500 and peaked around $126,000, plummeted nearly 10% over five days, hitting a low of $103,000 before rebounding to around $112,000. Ethereum dropped 14.2% from $4,365 to $3,742, while Solana, which had climbed to $232.60 on October 7, plunged nearly 20% to $178.72. XRP, another major token, saw a 15.5% drop from $2.80 to $2.36. According to TradingView News, over $7 billion in margin positions were wiped out in the first hour of trading alone, and Bitcoin’s 24-hour trading volume exceeded $70 billion as panic selling set in.
The carnage in crypto was mirrored by broader financial markets. The Nasdaq and S&P 500 posted their steepest declines in six months, as investors worldwide scrambled to adjust to the new reality of escalating U.S.-China trade tensions. The global crypto market capitalization fell over 9% in a single day, erasing roughly $1 trillion in value and sending the market’s Fear & Greed Index from a bullish 64 to a fearful 27 in record time.
Analysts were quick to dissect the causes behind the crash. The team at The Kobeissi Letter pointed to “excessive leverage and risk,” noting that on most major exchanges, except Bitfinex, the share of long positions exceeded 90%. The sell-off, they observed, actually began about an hour before Trump’s tariff announcement, but his statement “accelerated the decline during what was likely an already underway correction.”
“We believe this crash was caused by a combination of several sudden technical factors. It has no long-term fundamental consequences. A technical correction was long overdue. We are confident a trade deal will be reached, and cryptocurrency remains strong. We are optimistic,” the Kobeissi analysts concluded.
Others, like the team at Santiment, suggested that the market’s search for a single scapegoat—Trump’s tariff threat—was a sign of “typical rationalizing behavior.” In their view, the decline was not solely rooted in politics, but in a complex interplay of technical, market, and sentiment-driven forces. Still, they acknowledged that “trade relations between the U.S. and China will play a key role in crypto traders’ sentiment” in the short term, with positive news potentially reviving risk appetite.
Veteran traders saw the event as both a warning and an opportunity. Alex Becker, a well-known crypto trader, argued that "the sharp correction was partly driven by unprecedented impatience among investors in recent weeks." He advised against panic selling, suggesting that the market shakeout could mark the early stage of a new bull trend. Benjamin Cowen, another respected analyst, noted that Bitcoin’s dominance surged above 60% following the liquidation cascade, while Jan3 founder Samson Mow declared, “It’s time for the next phase of Bitcoin’s growth.”
There was, however, caution too. Economist Timothy Peterson told Cointelegraph that the market might enter a “cooling period,” with upward movement likely to continue in three to four weeks, albeit at a slower pace. Peter Brandt, a veteran trader, identified a potential target of $185,000 for Bitcoin, while analyst Frank Fetter suggested that the overbought zone for the leading cryptocurrency would occur around $180,000.
For context, September 2025 had been relatively calm, with Bitcoin eking out a modest 5% gain and Ethereum slipping by 5%. October’s first 11 days, by contrast, saw both a powerful rally to record highs and one of the steepest single-day sell-offs in crypto history. As VanEck noted in their market review, such volatility is rare for October, but not without precedent—and is often followed by periods of recovery.
Looking ahead, analysts agree that the path for crypto markets will depend on a mix of technical recovery, geopolitical developments, and investor sentiment. Key support levels—around $110,000 to $113,000 for Bitcoin and $3,825 for Ethereum—will be closely watched. Institutional interest, as evidenced by the record ETF inflows, could prove a stabilizing force. As James Butterfill of CoinShares put it, “Digital assets are increasingly seen as an alternative in times of uncertainty.”
For now, the dust is still settling. The events of October 10, 2025, serve as a stark reminder of crypto’s volatility and its sensitivity to global headlines. Whether this marks the start of a new chapter or just another dramatic episode remains to be seen—but one thing’s for sure: the eyes of the financial world are firmly fixed on what happens next.
