The Bitcoin liquidation crash was a leverage-driven wipeout that erased over $19 billion in positions, with futures liquidations topping $11 billion. On-chain data shows a rapid deleveraging event, not spot panic, that forced margin positions to unwind across exchanges.
-
Massive leveraged liquidations: $19B+ total, $11B futures
-
On-chain analytics (Glassnode) call it a “historic deleveraging event.”
-
Coinbase volume rose but did not always correspond to the largest price moves, per Scott Melkel.
Bitcoin liquidation crash erased over $19 billion in leveraged bets; read COINOTAG’s full report for data, expert quotes, and next-step insights.
What is the Bitcoin liquidation crash?
The Bitcoin liquidation crash refers to a weekend event in which rapid price moves and cascading margin calls triggered liquidation of more than $19 billion in leveraged crypto positions. On-chain metrics and futures data indicate the sell-off was primarily a forced deleveraging rather than a coordinated spot-market panic.
How did leverage and funding rates trigger the crash?
Open interest in futures markets fell sharply as margin calls auto-closed positions. According to Glassnode (on-chain analytics), the event erased over $11 billion in futures open interest — the largest such wipeout recorded. Funding rates plunged to levels not seen since the 2022 bear market, signaling aggressive short-term positioning and a rapid unwind of speculative bets. Scott Melkel, host of the Wolf of All Streets podcast, noted that Coinbase saw increased spot volume but that prior July trading days had higher volumes without major price movement, suggesting this event was a concentrated leverage shock rather than broad retail sell pressure.
Frequently Asked Questions
How much was liquidated in the crypto liquidation crash on Friday?
Over $19 billion in leveraged positions were liquidated across crypto markets during the weekend crash, with futures liquidations accounting for roughly $11 billion of that total, according to on-chain analytics reported by Glassnode and exchange activity data compiled by market observers.
Why did Bitcoin’s price recover shortly after the liquidation event?
Because the sell-off was largely a forced deleveraging, many long-term buyers and spot market participants were unwilling or unable to trade into the liquidation cascade. Once forced positions were cleared and funding rates normalized, liquidity returned and price rebalanced, allowing Bitcoin to recover from the low near $107,000 to higher levels within 24 hours.
On-chain Evidence and Market Signals
On-chain data firms labeled the episode a significant deleveraging. Glassnode described it as a “historic deleveraging event” with funding rate contractions and rapid declines in open interest. Exchange-level data indicates that spot trading volume rose on several platforms — Coinbase among them — but volume alone did not explain the depth of liquidations. Scott Melkel highlighted that similar or larger spot-volume days in July produced minimal price movement, reinforcing the interpretation that Friday’s collapse was driven by margin mechanics and stop-loss cascades.
What experts are saying
Scott Melkel (Wolf of All Streets) characterized the move as a “chain reaction of forced liquidations,” suggesting the core mechanism was auto-deleveraging. Glassnode’s analysis frames the outcome as a purge of speculative excess that reset funding conditions. These expert observations align with exchange-level statistics showing a sharp fall in funding rates and rapid open interest reduction.
Key Takeaways
- Leverage was the catalyst: Margin and futures liquidations drove most price action, not a coordinated spot-market sell-off.
- On-chain confirmation: Glassnode and exchange data show record futures liquidation and the steepest recent funding-rate drop.
- Market mechanics matter: Spot volume spikes alone don’t indicate sustainable selling; liquidity and exchange order-book conditions amplified the event.
Conclusion
COINOTAG reporting shows the weekend sell-off was a significant Bitcoin liquidation crash driven by forced deleveraging and collapsing funding rates, not a generalized spot panic. On-chain analytics (Glassnode), exchange data (Coinbase trade activity), and commentary from market participants like Scott Melkel converge on a single conclusion: speculative leverage was flushed from the system. Market participants should monitor funding rates and open interest as leading indicators to assess leverage risk going forward. Published: 2025-10-13. Updated: 2025-10-13. Author: COINOTAG.
