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Why Did $19.5 Billion Vanish in Crypto Overnight? Learn What Happened!
In an unprecedented turn of events, the crypto market experienced a chaotic 24-hour period, resulting in the erasure of over $19.5 billion in leveraged positions. This dramatic crash, which forced approximately 1.6 million traders out of their positions, was largely triggered by sudden U.S. tariff announcements on China. The turmoil was exacerbated by risky leverage practices across various exchanges, leading to a staggering daily swing of $20,000 for Bitcoin, which alone saw its market capitalization drop by $380 billion.
This liquidation event shattered previous records by nearly tenfold, outstripping the turmoil witnessed during the infamous FTX collapse and the market crash of March 2020. The sheer scale of this downturn—recorded between October 10 and 11, 2025—took many investors by surprise. Data from The Kobeissi Letter revealed that this liquidation was over nine times larger than any previous event, dwarfing the $2.2 billion erased in February 2025 and the $1.2 billion lost in May 2021.
The One-Sided Sell-off
Analysis across major exchanges confirmed that the sell-off was heavily skewed toward long positions. Out of the total $19.38 billion liquidated, approximately $16.7 billion came from long trades, creating a striking 6.7-to-1 ratio compared to shorts. Platforms such as Binance and Bybit reported that over 90% of liquidations impacted long positions, with Hyperliquid alone recording a staggering $10.3 billion in liquidations.
Interestingly, this swift downturn occurred at a time when the crypto market’s greed index had surged above 60. Bitcoin had recently surpassed $126,000 for the first time, indicating a bullish sentiment that quickly evaporated.
What Triggered the Catastrophic Crash?
The crash’s origins can be traced to a combination of prolonged market corrections following Bitcoin’s all-time high and escalating tensions from newly imposed U.S. tariffs on China. The Kobeissi Letter stated that the sell-off was characterized by a series of ominous events that linked geopolitical shocks to fragile market sentiment.
At 9:40 AM ET, substantial Bitcoin holders began to liquidate their positions, over an hour before former U.S. President Donald Trump tweeted about a looming tariff threat on China at 10:57 AM. Later, at 4:30 PM, a significant whale entered multi-million-dollar shorts, seemingly anticipating the impending drop. Just 20 minutes later, Trump announced a 100% tariff on China, dealing a critical blow to bullish sentiment in the market.
Trump’s announcement came late on a Friday after U.S. markets had closed, leaving the crypto market open and vulnerable. Prices plummeted into a liquidity vacuum as trading volume surged, setting the stage for one of the most rapid collapses in crypto history. By 5:20 PM, total liquidations had reached the staggering figure of $19.5 billion, with the whale reportedly closing positions for a profit of $192 million.
Despite the devastation, The Kobeissi Letter emphasized that this event was primarily technical rather than fundamental. The crash is seen as a necessary reset for the market and is not expected to have long-term implications. A potential trade deal between the U.S. and China could alleviate the uncertainty, allowing the crypto market to regain its footing.
As of now, Bitcoin has shown signs of recovery, trading at approximately $111,790. For more in-depth insights into the latest trends in the cryptocurrency landscape, explore our comprehensive coverage on crypto news. Additionally, if you’re looking to trade, check out Binance for more opportunities.
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