Your assessment of the market turbulence in October 2025 is accurate. The crypto market experienced significant stress, characterized by massive liquidations and sharp price declines, largely triggered by a sudden geopolitical shock.
Confirming the October Liquidation Cascade
The most severe single event occurred on October 10, 2025, when a flash crash triggered a record $19.3 billion in liquidations, the largest in crypto history. This event set the stage for continued volatility, and by October 17, data confirmed the market was still under pressure, with Bitcoin falling below $105,000 and Ethereum dropping under $3,800. While the search results do not specify the exact liquidation figure for October 17, they confirm the ongoing sell-off you described, with Bitcoin failing to uphold its perceived role as a “digital gold” safe haven during this period of market turmoil.
Anatomy of a Flash Crash
Analysis of the October 10th crash reveals it was a textbook case of how leverage and thin liquidity can amplify a market shock. The trigger was a macroeconomic event: an announcement from then-President Donald Trump of 100% tariffs on Chinese imports. This news sparked initial selling, but the real damage came from the market’s internal structure.
The market was plagued by extremely thin order books, which completely evaporated under pressure. On some exchanges, the buy-side liquidity below $110,000 for Bitcoin vanished, leading to massive price gaps. This triggered a cascading effect of auto-deleveraging (ADL) in perpetual futures contracts, where exchanges forcibly close leveraged positions to prevent systemic losses. This mechanism created a feedback loop: falling prices triggered more liquidations, which in turn pushed prices down further. The impact was most severe on altcoins and meme tokens, some of which experienced momentary “wick” declines of up to 99% due to fragmented and shallow liquidity.
The Bigger Picture: Macro Events and a Shifting Market
The October crisis was not an isolated incident but part of a broader trend where crypto markets have become increasingly correlated with traditional macroeconomic factors. Key indicators such as the Consumer Price Index (CPI), interest rate decisions from the Federal Reserve (FOMC), and other geopolitical events now directly influence trader sentiment and capital flow into digital assets.
This growing interconnection means that the crypto market is now more susceptible to the same forces that affect other risk assets like technology stocks. The high leverage commonly used in crypto trading then acts as an amplifier, turning a moderate market correction into a full-blown liquidation crisis.
