Crypto Market Turmoil: $7.5 Billion Liquidated in One Hour Amid Macroeconomic Fears

On Friday, October 10, 2025, the cryptocurrency market experienced a dramatic upheaval as $7.5 billion worth of leveraged positions were liquidated within just one hour, highlighting the extreme volatility and risks tied to high-leverage trading in digital assets. This was confirmed by data from Bloomberg and FXStreet.

The sell-off followed Bitcoin’s retreat from its recent all-time highs but was primarily triggered by renewed “risk-off” sentiment due to escalating macroeconomic tensions. Specifically, the threat of new tariffs between the United States and China heightened uncertainty across global markets, prompting investors to offload riskier assets rapidly.

Experts described the liquidation event as monumental. Within a 24-hour window surrounding the flash crash, over 1.6 million traders were liquidated, with total losses across crypto derivatives markets estimated at approximately $19.13 billion. The forced unwind was amplified by heavy leverage in perpetual futures, shrinking market liquidity, and cascading stop-loss orders that intensified selling pressure.

The market impact was widespread and severe:

• Price Collapse: Bitcoin plunged below the $110,000 level, while major altcoins like Ethereum suffered double-digit percentage drops, reflecting widespread panic selling.
• Forced Unwind Pressure: The liquidation of leveraged positions created a vicious cycle, where margin calls forced more selling, accelerating price declines.
• Capital Flight: Investors moved funds into traditional safe havens such as gold and government bonds, alongside stablecoins, to limit further losses.
• Persistent Volatility: The event pushed realized volatility to extreme highs, potentially prolonging unpredictable and turbulent trading conditions.

As market participants assess the aftermath of this historic liquidation, critical questions loom:

• Can key technical support levels withstand ongoing selling pressure, or will deeper declines follow?
• Will derivatives metrics like leverage ratios, funding rates, and open interest signal further downside risk or possible recovery?
• How might further geopolitical tensions or trade disputes influence market confidence and stability?
• Will institutional investors re-enter the market, or will cautious sentiment dominate, extending the period of uncertainty?

This liquidation crisis underscores the significant risks associated with leveraged crypto trading, especially amid rising macroeconomic uncertainties. The coming days will be pivotal in determining whether this episode represents a brief correction or a broader deleveraging and market reset.

Notably, the crypto market had already shown signs of weakness prior to Friday. Over the previous 24 hours, roughly $9 billion worth of crypto bets were wiped out, including $7.5 billion in long positions and $1.5 billion in shorts, marking the largest liquidation wave since at least early April.