bladed _44

On October 10, 2025, crypto experienced one of its most violent crashes ever — an event traders now call “10/10.”
In just a few hours, over $19 billion in leveraged positions were liquidated, order books collapsed, and prices free-fell in a way that shocked even veteran market participants.
This wasn’t just another leverage flush.
This was a liquidity failure❌.
In this article, we break down what really happened, why it got so bad, and most importantly, how to avoid getting destroyed when the next liquidity vacuum appears.
Market Context: The Scars Are Still Here
Fast-forward to February 2026, and the effects of 10/10 are still visible.
#Bitcoin has only lost even more important levels since then.
Market makers are more cautious than before
Many altcoins are still 30–50% below pre-crash levels
The trigger event often cited was Donald Trump’s surprise tariff threat on China, but that headline alone did not cause the crash.
It only lit the fuse.🔥
The real problem?
The market was already structurally weak.Leverage was high, confidence was high, and liquidity looked fine — until it wasn’t.
The Timeline: How Liquidity Vanished💨
Phase 1: Slow Weakness (Morning ET)
Around 9:50 AM ET, prices began drifting lower.
No panic yet — just subtle selling pressure.
But liquidity was already thinning.
Phase 2: Macro Shock Hits
Trump’s tariff comments hit global markets. Risk assets sold off fast — and crypto followed.
This is where things snapped.
The Liquidity Death Spiral‼️
As prices dropped:
Liquidations triggered automatically
Forced market sells hit already thin order books
Market makers pulled bids to avoid losses
Spreads exploded
Prices fell even faster
Liquidity didn’t “fade.”
It disappeared.
As prices started slipping, automated liquidations kicked in. This is where the real damage happened.💀
The Moment of Maximum Damage🩸
At 21:15 UTC, the worst minute of the crash:
$3.21 billion liquidated in 60 seconds
Over 1.6 million accounts wiped out by end of day
Total damage exceeded $19 billion
For perspective:🎯
That’s ~9× larger than the FTX collapse in pure liquidation value.📊
Where Prices Bottomed
$BTC : $104,000
$ETH : $3,400
$SOL : –40% intraday
Many mid-caps: –60% to –90%
Not because fundamentals changed —
but because there were no buyers❌

Why the Crash Was So Severe
1. Excessive Leverage

Long positioning was crowded. Once liquidation thresholds were hit, the chain reaction became unavoidable.
2. Thin Real Liquidity

High open interest ≠ deep order books. When volume dried up, price moved far faster than risk models assumed.
3. Exchange Stress

Multiple platforms experienced API delays and execution issues. Reports of temporary stablecoin dislocations worsened forced liquidations.
4. Informed Positioning

On-chain and derivatives data suggest large short positions were opened ahead of the macro headline, with estimated profits exceeding $190M during the cascade.

The Real Lesson: Price Doesn’t Matter Without Liquidity.Most traders focus on:Indicators,Patterns,Targets
But 10/10 proved one thing clearly:
Liquidity is the market. Price is just the output.
When liquidity vanishes:
Stops don’t work
Support doesn’t hold
“Strong projects” still nuke
How to Protect Yourself Next Time
1. Respect Open Interest Extremes
High OI + crowded positioning = danger.
2. Watch Liquidity, Not Just Price
Order book depth matters more than candles.
3. Reduce Leverage in Macro Risk Windows
News doesn’t move markets — liquidity does.
4. Accept That Crashes Are Structural, Not Emotional
Markets don’t care if you’re “right.”
Final Thoughts✍️
10/10 wasn’t a black swan.
It was a warning that the system can break when leverage meets illiquidity.
If you trade crypto — especially margin or perps — this is required knowledge.
The next crash won’t look the same.
But the mechanism will be identical.
Liquidity first. Always.

Liquidation Chart from October 10, 2025

And here’s a BTC price wick capturing the flash crash moment, bids gone, prices free-falling.