In an unprecedented cascade of liquidations, the crypto market has endured one of its most brutal episodes ever. According to Coinglass, within a single 24-hour span the total liquidation volume soared to USD 19.1 billion, impacting 1.62 million traders worldwide. The single largest forced position was on $ETH /USDT on Hyperliquid — a staggering USD 203 million liquidation.
Market Implosion: Widespread Carnage Across Assets
$BTC and $ETH , which had earlier taken a beating, clawed back some losses, dropping roughly 7% and 11% respectively during the liquidation storm. Meanwhile, many altcoins weren’t so lucky — some plunged to near-zero levels. Several smaller projects lost over 90% of value. Even wrapped derivatives of major tokens, like WBETH and BETH, saw sharp declines. At one point, IOTX price collapsed entirely.
Further adding to the chaos, stablecoins didn’t escape unscathed: USDE briefly decoupled from its peg, falling to 0.62 before returning.
As volatility surged, exchange infrastructure strained — Binance reportedly experienced downtime due to overwhelming traffic.
What Set It Off: Tariffs, Market Makers, and Fragile Liquidity
One high-impact spark: former U.S. President Donald Trump’s tariff announcement. On October 10, he broached the idea of hiking tariffs on China — and by the early morning of October 11, he threatened a sweeping 100% tariff. The news precipitated sharp sell pressure, especially in risk assets.
But geopolitical catalysts only tell part of the story. The deeper currents involved market makers and liquidity allocation. Crypto commentator @octopusycc pointed out that many market makers operate with constrained capital and can’t hedge sufficiently across the breadth of projects in today’s crowded field.
Projects are often categorized into tiers (0, 1, 2, 3, 4) based on perceived liquidity and backing. Most funding and support traditionally flow to Tier 0 and Tier 1 projects, leaving smaller ones more vulnerable. After the collapse of prominent firms like Jump, many smaller tokens were left in precarious positions.
When Trump’s tariff threat hit, market makers lacked the capacity to prop up all assets. In effect, capital was rerouted to secure bets in major projects, leaving lesser ones unsupported. The result: no counterparty interest, cascading liquidations, and a sharp downward spiral in many assets.
Through Chaos, Some Find Opportunity
Even amid turmoil, crypto’s dual nature as a risk-laden playground remains. Some traders who timed it right exited shorts at profit. Others “bought the dip” in mainstream or wrapped tokens — one influencer reportedly converted an entry into USD 8 million in gains by trading USDE and BETH.
Still, the broader market faces the task of rebuilding. The magnitude of the shakeout serves as a stark reminder: risk control matters more than ever. And as long as traders stay in the game, there will always be opportunities—though never without peril.
Disclaimer: This article reflects the author’s views and is for informational purposes only. It does not constitute financial or investment advice.