The largest single-day liquidation in crypto history

Last week, the market experienced a sell-off triggered by trade shocks, resulting in "the largest single-day liquidation in crypto history," followed by a gradual price recovery. On Friday, Bitcoin's price dropped from $121,000 to $109,000 in about seven hours, erasing the gains from the earlier "October rebound." According to CoinGecko, Ethereum's price fell to $3,686, while Solana hovered above $173.

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Crypto’s Largest Single-Day Liquidation: Nearly $7 Billion Liquidated in One Hour

This trading session triggered a "liquidation flash crash," with nearly $7 billion in funds liquidated in one hour, of which $5.5 billion came from long positions. According to Sean Dawson, head of research at the on-chain options platform Derive, Friday's total liquidations approached $20 billion, primarily consisting of $16.7 billion in long positions, marking "the largest single-day liquidation in crypto history."

The stock market was similarly affected, with the Nasdaq index dropping by 3.6%, the S&P 500 decreasing by 2.7%, and the Dow Jones Industrial Average falling by 1.9%.

October was initially considered a strong month for Bitcoin and cryptocurrency prices, but the market faced obstacles due to President Trump's trade war. According to CoinGlass, over $1 billion in crypto positions were liquidated in the past 24 hours, and as liquidations increased, cryptocurrency prices rapidly fell.

This sell-off occurred following Trump's announcement to cancel a meeting with Chinese President Xi Jinping and to impose significant tariffs on Chinese imports, with Trump warning that this move could cause "potential pain" for Americans.

Analysis: The Market Crash May Be Due to Short-term Overreactions to Geopolitics

After Trump's tariff warning, China also restricted the export of rare earth and critical minerals, further escalating tensions between the two major economies. By the weekend, China seemed to begin softening its stance, and analysts noted that the market's crash could be attributed to a short-term overreaction to geopolitical events.

Following this plunge, Bitcoin's price has rebounded to $115,100, a 5% increase; Ethereum has risen by 10.5% to $4,138. Major altcoins like Solana, BNB, and Dogecoin saw increases of 12%, 16.5%, and 11.4%, respectively.

Dean Serroni, CEO of Merkle Tree Capital, stated, "This rebound is a typical relief rally. Ethereum's 11% increase is a short-term recovery following the market's overreaction to Trump's sudden tariff news." He noted that with the reset of derivatives market pressure, selling pressure is relatively "weak," which has also facilitated the price recovery. Serroni added, "This market crash is an overreaction to geopolitics, not a structural breakdown."