The Friday crypto crash was driven by a rapid, algorithmic sell-off after a high-level miscommunication between the US and China; roughly $19.1B in liquidations occurred as BTC plunged from about $118,000 to $101,000, wiping out leveraged long positions and forcing broad market deleveraging.
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~$19.1B liquidated in 24 hours, with ~$16.7B longs.
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Bitcoin fell from about $118,000 to $101,000; several altcoins saw 40–80% intraday drops.
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Binance refunded impacted users ~$283M; open interest fell by roughly $65B, per CoinDesk and exchange statements.
Friday crypto crash: $19.1B liquidated after a Trump–China miscommunication sent BTC from $118,000 to $101,000. COINOTAG explains causes, data, and recovery outlook—read now.
By COINOTAG | Published: 2025-10-13 | Updated: 2025-10-13
What caused Friday’s crypto crash?
Friday crypto crash occurred after market-moving headlines about escalating U.S.–China trade tensions were misinterpreted by algorithms and traders, triggering an intense cascade of liquidations. Forced deleveraging amplified price moves, producing roughly $19.1B in total liquidations and a multi-hour collapse in liquidity across major exchanges and perpetual markets.
How did the Trump–China miscommunication trigger so many liquidations?
Initial reports that President Trump threatened 100% tariffs and tighter export controls increased perceived geopolitical risk. High-frequency trading algorithms and cross-collateralized positions reacted instantly, producing concentrated sell pressure. With many positions leveraged, a ~13% intra‑hour BTC drop and 40–80% losses in some altcoins caused automated margin calls and forced unwinds, magnifying the selloff.
Frequently Asked Questions
How much value was wiped out in the crash and where did it occur?
About $19.1 billion in crypto positions were liquidated within 24 hours. Roughly $16.7 billion were long positions. Liquidations spanned centralized exchanges and perpetual (perps) protocols; reported open interest declines reached approximately $65 billion, according to CoinDesk reporting and exchange disclosures.
Did exchanges or protocols report failures that made the situation worse?
Some exchanges reported operational issues and token depegs that contributed to user losses. Binance disclosed refunds to impacted users totalling approximately $283 million. Other platforms and DeFi protocols reported large equity drawdowns, with Hyperliquid indicating more than $1.2 billion in trader equity vaporized, as noted in market reports.
Key Takeaways
- Immediate cause: A high-level US–China trade message was interpreted as escalatory, triggering algorithmic selling.
- Scale of damage: ~ $19.1B liquidated in 24 hours; open interest down about $65B, and many altcoins lost 40–80% intraday.
- Market implications: Forced deleveraging reset leveraged positions—this can precede a structural recovery if macro drivers remain intact.
Conclusion
The Friday crypto crash—front‑loaded as a Trump–China miscommunication—resulted in historic liquidations and a sharp, algorithm‑driven collapse in prices. COINOTAG’s review of exchange statements and market data (CoinDesk, exchange disclosures, Hyperliquid reporting) shows leveraged positions and cross-collateralization amplified losses. While refunds and protocol responses have mitigated some user harm, the episode underscores the systemic risks of concentrated leverage; market participants should reassess risk controls and collateral policies as the market stabilizes. Read COINOTAG’s continuing coverage for updates and official data releases.
Additional context and expert perspectives
Jonathan Man, portfolio manager at Bitwise, described the event as “the worst liquidation event in crypto history” and highlighted the speed and breadth of deleveraging. Market researchers and exchange statements indicate the selloff was largely algorithmic and cascade-driven, not solely narrative-driven. Official data points used in this report include CoinDesk liquidation tallies, exchange disclosures on refunds and user impacts, and reported open interest movements.
Recovery outlook and what to watch next
Key indicators for recovery include declining liquidation velocity, stabilization of open interest, and improved liquidity in major order books. If the trade‑tension narrative is clarified and macro fundamentals remain supportive of risk assets, a V‑shaped rebound is possible; however, further protocol‑level stress or additional geopolitical escalation would prolong volatility. COINOTAG will monitor official updates, exchange notices, and on‑chain metrics for subsequent reporting.
