$19 Billion Liquidated in 24 Hours — What Just Happened to the Crypto Market?
2025.10.11
According to data from Coinglass, over the past 24 hours the crypto market saw more than $19 billion in liquidations, with 1.6 million traders affected. The largest single liquidation occurred on Hyperliquid’s ETH-USDT pair, totaling $203 million.
Both Bitcoin and Ethereum experienced sharp flash crashes, dropping 7% and 11%, respectively. Some smaller altcoins plunged over 90%, while even stablecoins were not spared — USDe briefly depegged to $0.62 before recovering.
Notably, these figures may only represent part of the story. On-chain analyst MLM suggested that the actual liquidation scale could range between $30–40 billion, far exceeding what’s captured by public trackers.
The Trigger: Macro Policy Shock and a Chain of Liquidations
Echobit Insight observed that the immediate catalyst for the sell-off was former U.S. President Donald Trump’s proposal to impose a 100% tariff on “all critical software” exports. The announcement sent Wall Street into turmoil — U.S. stocks spiked and then reversed — as risk-off sentiment quickly spilled over into the crypto market, sparking massive sell pressure and cascading liquidations.
From an on-chain perspective, the technical trigger appears to be USDe’s depeg event. After the protocol launched a 12% yield incentive, capital flooded into leveraged “looping” strategies. While highly profitable during bullish conditions, this structure amplified systemic risk. Once the tariff news hit and sell pressure mounted, USDe’s value briefly plunged below $0.66, igniting a full-scale liquidation cascade.
Behind the Altcoin Meltdown: Liquidity Withdrawal and Market-Maker Stress
According to analyst @octopusycc, the sharp decline in altcoins was largely driven by market makers’ inability to hedge positions effectively amid extreme volatility. Some liquidity providers reportedly tightened exposure or exited entirely, exacerbating slippage and panic across secondary markets.
Institutional players, meanwhile, remain cautious. Liquid Capital (formerly LD Capital) stated that it has not yet entered the market, waiting for more clarity. Several market participants described the crash as a “leverage reset” — a painful but necessary cleansing after months of excessive speculation and margin buildup.
Reshaping Rationality Through Volatility
Historically, large-scale liquidations have often marked turning points for market structure and sentiment. For investors, projects, and exchanges alike, risk management and liquidity discipline remain fundamental to long-term stability.
As Echobit Insight notes, the recent turbulence underscores a core truth of Web3 finance: behind every high leverage and high yield lies the need for rational judgment and resilient strategy.
Such volatility may not signal the end of a cycle — but rather, a necessary step toward a more mature crypto market.