$2.56B Liquidated in 24 Hours as Leverage Triggers the Biggest Crypto Wipeout Since the Oct 10 Crash
Crypto Market Hit by $2.56 Billion Liquidation Wave as Leverage Triggers Historic Sell-Off
The cryptocurrency market has been rocked by its largest leverage-driven liquidation event since the October 10 crash, wiping out more than $2.56 billion in leveraged positions within just 24 hours. The violent sell-off sent shockwaves through digital asset markets, briefly pushing Bitcoin below the $76,000 level and marking one of the most severe drawdowns in the sector’s history.
Market data reviewed by hokanews shows that Bitcoin’s decline represents a drop of roughly 40 percent from its 2025 peak, underscoring how quickly sentiment has shifted in what was once a strongly bullish environment.
The scale of the liquidation event was confirmed by multiple industry trackers and acknowledged by the Coin Bureau account on X, which hokanews cited as part of its verification process.
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| Source: XPost |
The Largest Liquidation Since October 10
According to market observers, the $2.56 billion liquidation wave is the largest since the October 10 crash, when more than $19 billion in leveraged crypto positions were erased in a single day.
Liquidations occur when leveraged traders are forced out of positions after prices move against them, triggering automatic sell orders that further intensify market declines. In this case, leverage did not merely amplify the sell-off. It became the primary driver.
Analysts say the speed and scale of the liquidation highlight how deeply leveraged the crypto market had become in recent months.
Bitcoin’s Drop Below a Critical Threshold
Bitcoin briefly falling below $76,000 carried psychological significance for traders. The level had been viewed as a key support zone following earlier corrections, and its breach triggered additional selling pressure.
Once that threshold was broken, liquidation cascades accelerated across major exchanges, pulling prices lower in a matter of hours.
While Bitcoin later stabilized above those lows, the damage to market confidence was already done.
A $1.64 Trillion Market Value Erased
Beyond the liquidation figures, the broader crypto market has suffered an extraordinary contraction in total value. Over the past four months, approximately $1.64 trillion in market capitalization has been erased, making this the largest drawdown in crypto market history.
This decline surpasses previous downturns not only in absolute terms but also in speed, raising concerns about market structure and risk concentration.
Prices across many major assets have now returned to levels last seen after the so-called “Liberation Day” tariff shock, a macroeconomic event that previously rattled global financial markets.
Leverage as the Core Risk Factor
Market analysts widely agree that excessive leverage was the central vulnerability exposed by the sell-off. As prices declined, margin calls and forced liquidations created a feedback loop that overwhelmed organic buying interest.
In traditional markets, circuit breakers and trading halts can slow such cascades. In crypto, where markets operate around the clock, liquidations can snowball rapidly.
“The leverage didn’t just accelerate the sell-off,” one analyst told hokanews. “It became the sell-off.”
Why Leverage Had Grown So Large
In the months leading up to the crash, optimism surrounding crypto’s long-term outlook encouraged traders to take on increasingly aggressive positions. Low funding rates and high liquidity made leverage appear manageable, even attractive.
As prices continued to rise earlier in the cycle, many traders increased position sizes, betting on sustained upside. When momentum reversed, those same positions became liabilities.
The result was a market primed for a sharp and disorderly unwind.
Spillover Across the Crypto Ecosystem
The liquidation wave did not affect Bitcoin alone. Ethereum, major altcoins, and smaller tokens all experienced sharp declines as capital fled riskier positions.
Decentralized finance platforms also felt the impact, with collateral values dropping and automated liquidation mechanisms activating across lending protocols.
The interconnected nature of crypto markets meant that stress in one area quickly propagated throughout the ecosystem.
Investor Sentiment Turns Defensive
Following the sell-off, investor sentiment has turned markedly defensive. Funding rates across derivatives markets have dropped sharply, reflecting reduced appetite for leveraged exposure.
Some traders view the reset as a necessary cleansing of excess risk. Others worry that continued macroeconomic uncertainty could prolong volatility.
Historically, major liquidation events have often marked inflection points, either preceding stabilization or signaling the start of deeper corrections.
Coin Bureau Confirmation and Market Attention
The magnitude of the liquidation event gained broader attention after acknowledgment by Coin Bureau on X. While Coin Bureau did not offer predictions, its confirmation helped validate the scale of the market move and brought it into wider discussion.
Hokanews cited the confirmation as part of its reporting, relying on market data and independent analysis to contextualize the event.
Lessons From the October 10 Crash
Comparisons to the October 10 crash have been unavoidable. That event, which erased more than $19 billion in a single day, was widely viewed as a wake-up call about leverage risk.
Yet the recurrence of a major liquidation wave suggests that lessons from that period may not have been fully absorbed.
Market veterans note that leverage tends to rebuild during periods of optimism, setting the stage for repeated cycles of excess and correction.
What Comes Next for the Market
In the near term, analysts will be watching whether liquidation pressure has fully subsided. Key indicators include open interest levels, funding rates, and on-chain transfer activity.
If leverage continues to unwind, prices may remain volatile as the market searches for a new equilibrium.
Longer term, some observers believe the drawdown could encourage more sustainable growth, with less reliance on borrowed capital.
A Turning Point or Another Chapter?
Whether this event marks a turning point or simply another chapter in crypto’s volatile history remains unclear. What is certain is that the scale of the sell-off has reshaped market psychology.
For investors, the episode reinforces the importance of risk management and the dangers of excessive leverage in an inherently volatile asset class.
As the dust settles, attention will turn to whether confidence can rebuild without the fuel of extreme leverage.
Hokanews will continue to monitor developments as the crypto market navigates the aftermath of one of its most dramatic liquidations to date.
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Writer @Ethan
Ethan Collins is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.
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