> For the complete documentation index, see [llms.txt](https://research.blockscope.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://research.blockscope.co/the-october-crash/beyond-the-candle-the-crypto-apocalypse-of-october-10.md).

# Beyond the Candle: The Crypto Apocalypse of October 10

<figure><img src="/files/3bjRQjGdegdNq4auPHsj" alt=""><figcaption></figcaption></figure>

## Summary

On October 10, 2025, the cryptocurrency market experienced the largest liquidation event in its history, **$19 billion** in leveraged positions were eliminated within 24 hours, [with some estimates placing the total above $30 billion](https://x.com/coinglass_com/status/1976796969961193641) when delayed exchange reporting is accounted for. This event erased \~**$1 trillion** in total market capitalization and exposed critical structural fragilities in crypto market infrastructure.

<figure><img src="/files/ZAIhzPb3BypWsKmiMwQH" alt=""><figcaption><p><a href="https://www.cnn.com/2025/10/13/business/crypto-bitcoin-price-drop-trump-tariffs">On Friday evening, Bitcoin went below $105K</a></p></figcaption></figure>

In this article, we examine the trigger behind this crash, how the events unfolded, and what worked and what failed, during this historic market meltdown.

## The Macro Catalyst: Trump's Tariff Threat

President Trump's October 10 announcement threatening [**100% tariffs on all Chinese imports**](https://www.usatoday.com/story/news/politics/2025/10/10/trump-100-percent-tariffs-china-imports-trade-war/86631090007/) starting November 1 served as the catalyst. Within three hours, Bitcoin crashed from $123,000 to $102,000, a $20,000 or 16.9% drop, erasing $380 billion in BTC market cap alone. Ethereum fell from $4,346 to $3,574 (17.8% decline), Solana dropped 30%, Cardano plummeted 30%, and select altcoins crashed 60-90%. An altcoin index recorded a near-40% collapse within minutes.

<figure><img src="/files/QxPx0XcmB9jU1tn6MtWJ" alt=""><figcaption><p>Top Crypto Liquidation Events since Covid</p></figcaption></figure>

## Liquidation Cascade: Exchange-Level Breakdown

The liquidation event unfolded with unprecedented velocity, approximately $7 billion was liquidated in a single hour on Friday evening. [Exchange-level data from Coinglass reveals severe concentration](https://www.coinglass.com/LiquidationData):

* **Hyperliquid**: $10.3 billion liquidated, with $1.23 billion in trader equity wiped out and 6,300 wallets completely eliminated
* **Bybit**: $4.65 billion liquidated
* **Binance**: $2.41 billion liquidated

Of the $19.1 billion total, **$16.7 billion came from long positions** (87.4%), reflecting extreme bullish positioning prior to the crash. Over **1.6 million individual traders** were liquidated.

## Winners in the Wreckage: Counter-Trend Profits

While nearly everyone lost their money, few made fortunes. [Several whales capitalized on the rebound](https://www.mitrade.com/insights/news/live-news/article-3-1189334-20251013) :

* **Wallet 0xe9d**: Closed a BTC long for **$265,000 profit** overnight
* **Wallet 0x728**: Built ETH and SOL longs with **$1.56 million unrealized gain**
* **World Liberty Financial advisor**: Opened a 20x long on 125.7 BTC ($14.3 million), later adding 3x long on 850,000 ASTER ($1.25 million)
* **Wallet 0xb9fe**: After losing $2 million in liquidations, reopened a 25x long on 18,960 ETH ($72.7 million), recovering losses plus **$3.6 million profit**

### Pre-Positioned Whale Activity: Suspicious Timing

On-chain analytics identified highly suspicious whale activity (`0xb317d2bc2d3d2df5fa441b5bae0ab9d8b07283ae`)  preceding the crash :

* **$1.1 billion short position**: A whale opened more than $1.1 billion in combined Bitcoin and Ethereum short positions hours before Trump's tariff announcement.
* **$192-200 million profit**: This trader closed 90% of positions immediately after the crash, securing estimated profits of $192-200 million in a single day.
* **Subsequent activity**: [The same wallet reopened a **$163 million Bitcoin short** on October 12](https://finance.yahoo.com/news/crypto-whale-opens-163m-bitcoin-065907801.html), currently sitting at over $3 million unrealized profit.

The precision timing has sparked market manipulation investigations, with crypto attorney John Deaton publicly calling for regulatory scrutiny.

<figure><img src="/files/WymSYbrNyZUjJK1x7Dks" alt=""><figcaption><p><a href="https://app.hyperliquid.xyz/leaderboard">TheBitcoinOG is currently ranked third on the Hyperliquid leaderboard</a></p></figcaption></figure>

<figure><img src="/files/TqPPKujOIfUKozKMhA2m" alt=""><figcaption><p><a href="https://x.com/lookonchain/status/1977917680691642742">https://x.com/lookonchain/status/1977917680691642742</a></p></figcaption></figure>

### Hackers Panic Selling&#x20;

During the market turmoil, unusual on-chain behavior was observed as several hacker wallets panic-sold ETH for DAI, later buying back at significantly higher prices, a rare case of emotional trading even among exploiters.

<figure><img src="/files/VlAd98cWghd3wnJssmqz" alt=""><figcaption></figcaption></figure>

<figure><img src="/files/1uEnUriF0xMxaqmCichY" alt=""><figcaption></figcaption></figure>

## Market Recovery Metrics

By October 13, markets showed tentative stabilization :

* **Bitcoin**: Recovered to $114,000-115,000 (11.8% rebound from lows)
* **Ethereum**: Climbed back above $4,100 (14.7% recovery)
* **24-hour liquidations**: $620 million on October 13, with a 34-66 split favoring short liquidations, a complete sentiment reversal
* **Volume surge**: Total 24-hour volume jumped 26.8%, suggesting re-entry by previously liquidated traders
* **Bitcoin dominance**: Rose to 58.45%, indicating capital flight to large-cap safety

## Infrastructure Failures: What This Event Exposed

**Leverage saturation**: Pre-crash Bitcoin open interest exceeded $50 billion, indicating dangerously crowded long positioning

**Weekend liquidity vacuum**: The crash occurred after U.S. markets closed on Friday, removing institutional liquidity buffers

**Cross-margin contagion**: Centralized exchanges' auto-liquidation of cross-margined collateral amplified altcoin selloffs

**No circuit breakers**: Unlike traditional markets with coordinated halt mechanisms at 7%, 13%, and 20% thresholds, crypto exchanges operate independent risk engines with no systemic safeguards

### Bottom Line

The October 10 liquidation event represents not merely a price correction but a market integrity stress test that revealed asymmetric information exploitation, infrastructure fragmentation, and the absence of coordinated risk controls across the trillion-dollar crypto ecosystem.

**Written by**: [Tushar Tiwari](https://in.linkedin.com/in/tushar-tiwari-1380271b7), Blockchain Forensics Analyst @ Blockscope

For more information, please reach out to us at **<hello@blockscope.tech>**

<figure><img src="/files/Bzxx1zvoyq8gdLS56UTN" alt=""><figcaption></figcaption></figure>

Disclaimer: Best Effort Work

This article reflects our best-effort analysis based on information available as of publication. Please note:

* **Data limitations:** Sources may be incomplete and the dataset can contain inaccuracies, omissions, or errors.
* **Subject to change:** New or updated evidence may emerge that could materially alter parts of this report.
* **Interpretive nature:** Findings and conclusions are based on our current understanding and may evolve over time.
* **No guarantees:** While we’ve taken reasonable steps to ensure accuracy, we cannot guarantee that all information is fully correct or complete.

This document should be treated as a snapshot of knowledge at the time of writing and may be revised if reliable new information becomes available.