Crypto Markets Reel from $19 Billion Liquidation Cascade
Crypto markets absorbed about $19 billion to $20 billion in forced liquidations in 24 hours on October 10, marking the largest single-day deleveraging ever. This significant event has left many wondering what actually happened and how the market is reacting to the aftermath.
Hyperliquid processed more than $10 billion, while Binance accounted for around $2.4 billion. Altcoins were under the most selling pressure, while Bitcoin’s decline remained comparatively small. According to Bitwise portfolio manager Jonathan Man, about $65 billion in futures open interest (OI) disappeared across the various trading venues during the cascade, resetting positioning to levels last seen in July.
Market Reaction and Recovery
The washout was concentrated offshore as Hyperliquid and Bybit absorbed the largest liquidation volume, while Binance’s share was smaller than typical for an event of this magnitude. CME retained a larger share of Bitcoin futures OI during the selloff, and Coinglass data now shows that CME, Binance, Bybit, and OKX are the top Bitcoin futures locations by notional value. Despite the notable negative episode, Bitcoin is just 8% below its all-time high of $126,000 and is trading at $115,058.29 as of press time.
Large market capitalization altcoins also recorded significant recoveries. Ethereum, XRP, and Dogecoin are all up 10% since October 10th. BNB is up 15.6% over the same period after setting a new all-time high of $1,375.11 on October 13th. Solana is up 8.3% since liquidation, and Cardano has rallied 13% over the same period.
Financing and Base Consolidation
By October 10th and 11th, perpetual swap funding rates on major currency pairs fell into negative territory or remained near zero. Additionally, Glassnode reported that total funding has reached its lowest level since the 2022 bear market, confirming clean deleveraging. Stock market trackers around the bottom recorded neutral to negative eight-hour prints on Binance, OKX, and Bybit.
Altcoin perpetuals showed an even stronger reversal. Solana’s eight-hour funding rate fluctuated -0.23% at multiple intervals on October 11, a rare, widespread “pay-shorts” regime that signals a shift from crowded long positions to defensive positioning. This reversal coincided with a collapse in altcoin OI and strong base compression in date futures, a classic footprint of a leverage purge outside of Bitcoin.
ETF Flow Dynamics and Liquidity Gaps
Farside Investors data on U.S.-traded spot Bitcoin ETF inflows shows strong net inflows early in the week, tapering until the crash and then turning slightly negative on October 10. BlackRock’s IBIT raised $899.4 million on October 7 and $426.2 million on October 8. As of October 9, IBIT inflows had declined to $255.5 million, while Fidelity’s FBTC posted an outflow of $13.2 million and Grayscale’s GBTC saw redemptions of $45.5 million, combining for a net inflow of nearly $198 million.
The stress was concentrated where the order books were thinnest. Several altcoins briefly traded near zero on some exchanges due to leverage reduction pullbacks that left certain pairs with temporary pockets of air. Bitcoin stabilized faster as it benefits from a deeper order book and a developing ETF buyer base. Read more about the crypto market’s reaction to the liquidation cascade at https://cryptoslate.com/weekend-crypto-black-friday-liquidation-cascade-what-actually-happened/
