The October 2025 crypto liquidation: what happened to leveraged positions

What happened on 10 October 2025 in the crypto liquidation?

Friday, 10 October 2025 brought the largest liquidation day recorded in this series. CoinShares reports US$19 billion as the officially reported total and notes that actual losses could exceed US$50 billion. FTI Consulting describes more than $19 billion of crypto leverage liquidated in roughly a day.

Bitcoin fell to a low of $104,782.88 across 10 and 11 October, more than 14% below its Friday high of $122,574.46. Ether fell 12.2% to $3,436.29. On Binance, the token ATOM briefly dropped from US$4 to US$0.001, a sign of how thin some order books became in the rush. Such a gap between two prices on one venue shows why a single quote can mislead during a fast move.

What triggered the October 2025 crypto liquidation?

The trigger was a 100% tariff announcement on Chinese imports. FTI Consulting describes a 100% China tariff threat hitting global risk assets, with crypto reacting most severely. Crypto trades at all hours, so it was among the first markets to price the news when it arrived on a Friday.

A news shock needs fuel to become a liquidation. The fuel was a large stock of leveraged positions, concentrated on unified-margin venues, where long positions were especially vulnerable. The tariff news explains the timing of the fall, and the size of open positions explains its depth. Both parts matter to a risk review, because news can be watched while positioning needs its own measurement.

How did leveraged positions close in the October 2025 liquidation?

A leveraged position closes when its margin falls too low. Exchanges sell the position at the market, and each sale pushes the price lower. Across futures markets, open interest fell from $175 billion to $125 billion in less than one day, according to Amberdata as cited by CoinShares. That drop measures positions closed.

Large liquidity providers also cut their risk and pulled their orders, which left order books very thin, according to Coinwatch. When fewer orders wait at each price, one forced sale moves the market further. The result is a loop: forced selling, thinner books, wider price moves and then more forced selling.

What is auto-deleveraging in the October 2025 crypto liquidation?

Exchanges activated auto-deleveraging to stay solvent. The tool closes profitable positions of other traders to cover the losses of positions that could not be closed at a fair price. Hyperliquid used it on short positions, and CoinShares says this worked because the market low could be absorbed. Lighter did not need it, since its insurance reserves were sufficient.

FTI Consulting notes that some of the best-hedged shorts found their positions reduced or entirely closed. A trader who had planned carefully could therefore lose a hedge in the middle of the move. Knowing whether a venue uses auto-deleveraging, and how, is a basic question before holding a leveraged position there.

How did outages and thin books affect the crypto liquidation?

Infrastructure strained under the load. Binance cited systems under high load and temporary delays. Lighter reported a serious outage between 10:30 PM and 3:00 AM EST. dYdX was offline for almost 8 hours. Hyperliquid was the only major platform CoinShares describes as stable throughout the event.

An outage matters because a trader cannot add margin or close a position on a platform that is down. The risk of the venue adds to the risk of the market. A reader who lists the venues in use, and the backup for each, shortens the time lost when a platform slows during a fast move. Planning for an outage costs little and matters most in the first hour.

Why did stablecoin depegs matter in the October 2025 liquidation?

USDe, a stablecoin meant to track the US dollar, fell to US$0.65 on Binance. BNSOL and WBETH also lost their pegs there. These assets were widely used as collateral, so heavy selling pushed their prices lower and triggered further liquidations. FTI Consulting says the USDe price divergence pushed thousands of accounts through maintenance thresholds.

Binance said its pricing relied on internal spot markets rather than external oracles, which opened a window for arbitrage. The lesson concerns collateral: an asset valued at one dollar on paper can trade lower on a single venue. A rule that checks how a platform prices collateral reduces the surprise during a fast fall, and it takes a reader only a few minutes with a venue’s published rules.

What changed after the October 2025 crypto liquidation?

FTI Consulting reports that open interest fell more than 40% from its October highs, and perpetual funding rates normalized. Bitcoin ETFs saw significant outflows. Several venues tightened leverage caps and raised collateral haircuts. CoinShares also notes unconfirmed speculation about a coordinated attack, which remains unproven in the public record.

A reader can turn this chapter into 3 checks: ask which venues use auto-deleveraging, ask how each prices its collateral and size leverage to a fall of 14% in a day. The EQOS Asia method page shows how checks become a score, and a 30-minute pre-diagnostic applies them to your exposure. This page is general information, not investment advice.

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About the author

Stéphane Jambu

President, EQOS Forecast Asia

Stéphane Jambu leads EQOS Forecast Asia and works as a consultant in e-commerce, search visibility, and AI. LinkedIn profile