10 October 2025 — In a dramatic sell-off, more than US$6 billion worth of leveraged cryptocurrency positions were liquidated in a single hour, as markets responded sharply to geopolitical risk, tariff threats, and momentum unwinds.
The liquidations followed a surge in volatility after U.S. President Donald Trump announced plans for 100% tariffs on Chinese imports and new export controls on software — moves that rattled risk assets globally.
Bitcoin was one of the hardest hit. It tumbled more than 12% from its recent highs above US$125,000, temporarily dropping to around US$113,000 in New York trading.
Data from Coinglass shows that within the same hour, both long and short positions were aggressively liquidated, a signal that the liquidation cascade was broad, not one-sided.
What Triggered the Flush
- The tariff and export control announcements sparked risk aversion, causing derivatives traders to unwind exposure.
- Leverage in crypto derivatives means that even modest adverse moves can force margin calls, cascading liquidations down the order book.
- The abruptness of the announcements likely exacerbated the sell-off, giving limited time for risk hedges or rebalancing.
Key Implications
- Volatility likely to persist: Such a sharp liquidation event raises the potential for continued choppy trading and deeper price swings.
- Sentiment shift: The speed and scale of liquidations may reduce risk appetite among speculative traders, at least temporarily.
- Cross-asset risk: Crypto stress may spill into equities, tech, and other risk-sensitive asset classes, especially in Asia and emerging markets.
- Opportunity for flows: For institutional or long-term investors, sharp corrective events often present entry points, if fundamentals hold.
- Regulation & derivatives scrutiny: The episode could re-ignite debates over leverage limits, margin practices, and derivatives oversight in the crypto space.
