$9.4B in Liquidations Over 24 Hours Triggers ‘2021 Type Situation for Altcoins’
John: Hey there, folks! I’m John, a longtime writer for Blockchain Bulletin, where I break down the wild world of crypto in simple terms. Today, we’re diving into the massive $9.4 billion liquidation event that rocked the crypto market recently, drawing parallels to the 2021 altcoin shakeout—and what it means for investors. For readers who want a full step-by-step guide, you can also check this exchange guide.
Lila: Hi everyone, I’m Lila, John’s assistant who’s always eager to learn more about crypto. John, what exactly are these “liquidations” and why is everyone comparing this to 2021?
What Are Crypto Liquidations?
John: Great question, Lila. In crypto trading, liquidations happen when leveraged positions—basically bets on price movements using borrowed money—get automatically closed out if the market moves against them. It’s like playing poker with money you don’t fully have; if you lose big, the house takes everything. This recent event on 2025-10-10 saw over $9.4 billion wiped out in just 24 hours, according to CryptoSlate, making it one of the largest single-day liquidations ever.
Lila: Wow, that sounds intense. So, is leverage like borrowing from a bank to buy a house, but for crypto?
John: Exactly! Think of it as a mortgage for your trades—if prices drop too fast, the exchange sells your assets to cover the loan, often at a loss. In this case, reports from CoinDesk note that a broader market sell-off, triggered by global events, led to $16 billion in long positions being liquidated as Bitcoin and Ethereum plunged.
The Background: What Sparked This Crash?
John: Let’s rewind a bit. On 2025-10-10, former U.S. President Donald Trump’s announcement of potential 100% tariffs on Chinese imports sparked a global market panic, as reported by CoinDesk. This rippled into crypto, causing Bitcoin to drop sharply and triggering a chain reaction of liquidations. Cointelegraph covered how this extended to altcoins, with some losing up to 50% in value overnight.
Lila: Tariffs? Like extra taxes on imports? How does that connect to crypto?
John: Spot on—tariffs are taxes on goods coming into a country, and Trump’s warning about China ignited fears of trade wars, hurting stocks and crypto alike. As of 2025-10-13, the market is still recovering, but this event erased $19 billion in total liquidations across platforms, per TradingView News, dwarfing previous crashes like the one in March 2020.
Historical Context: Echoes of 2021
John: This isn’t the first rodeo. Back in May 2021, a similar altcoin bloodbath followed regulatory crackdowns in China and Elon Musk’s tweets about Bitcoin’s energy use, leading to massive liquidations. CryptoSlate points out that the 2025 event mirrors that “2021-type situation,” where overleveraged traders got wiped out, resetting the market for a potential rebound.
Lila: So, it’s like history repeating? Were there any big differences this time?
John: In many ways, yes—both involved hype-fueled leverage. But in 2025, we saw record volumes on platforms like Hyperliquid, where $1.23 billion was liquidated in one event alone, as per CoinDesk. Unlike 2021, this crash was tied more to macroeconomic triggers rather than just crypto-specific news.
Impact on Altcoins and the Broader Market
John: Altcoins—those alternative cryptocurrencies beyond Bitcoin and Ethereum—took the hardest hit. Coins like Solana and various meme tokens dropped 30-50%, triggering what CryptoSlate calls a “2021-type situation” where weaker projects might not recover. Overall, the crypto market cap shed hundreds of billions, with Cointelegraph noting Ethereum’s USDe stablecoin briefly dipping below $1.
Lila: Ouch! Does this mean altcoins are riskier than Bitcoin?
John: They often are, due to lower liquidity and higher volatility. For example, in this crash, over 6,300 wallets on Hyperliquid were wiped out, per CoinDesk. It’s a reminder that while Bitcoin acts like digital gold, altcoins can be more like speculative startups (and hey, not every startup makes it big—think of them as tech stocks on steroids).
Reasons Behind the Massive Liquidations
John: Leverage was the big culprit here. Traders borrowing up to 100x their capital got caught off-guard by the sudden drop. CoinDesk reported $16 billion in long positions liquidated as Wall Street’s sell-off extended to crypto. Add in automated trading bots amplifying the moves, and you have a perfect storm.
Lila: Bots? Like robots trading?
John: Yep, algorithmic programs that buy or sell based on rules. When prices tank, they trigger more sales, creating a domino effect. Posts on X (formerly Twitter) from traders highlighted the chaos, with some calling it the “largest ever” event, though we should treat social media sentiment as just that—inconclusive vibes, not hard facts.
Tips for Navigating Volatility
John: If you’re trading or investing, here are some practical tips based on lessons from this event:
- Limit leverage: Stick to 2-5x at most to avoid total wipeouts, as seen in the $9.4 billion liquidation wave.
- Diversify: Don’t put all eggs in altcoins; balance with stable assets like Bitcoin or USDT.
- Use stop-loss orders: Set automatic sells to cap losses, a strategy that could have saved many during the 2025-10-10 crash.
- Stay informed: Follow trusted sources like CoinDesk for real-time updates, not just hype on social media.
- Think long-term: Remember, markets recover—after 2021’s crash, Bitcoin hit new highs by November 2021.
Lila: Those sound helpful! What about for total beginners?
John: Start small, use reputable exchanges, and never invest more than you can afford to lose. It’s all about education over speculation.
Looking Ahead: Recovery and Future Outlook
John: As of 2025-10-13, the market is showing signs of stabilization, with Bitcoin retesting bullish patterns like the golden cross, per TradingView News. Looking ahead, if tariffs ease or positive regulations emerge, we could see a rebound similar to post-2021. But volatility might persist into late 2025, especially with ongoing global tensions.
Lila: So, is this a buying opportunity or time to wait?
John: It depends on your risk tolerance—past events like this have led to strong recoveries, but always do your own research.
John: Well, that wraps up our chat on this epic liquidation event—it’s a stark reminder of crypto’s highs and lows, but also its resilience. Stay curious and informed, folks. And if you’d like even more exchange tips, have a look at this global guide.
Lila: Thanks, John! Key takeaway: Crypto can crash hard, but understanding liquidations helps you ride the waves smarter.
This article was created using the original article below and verified real-time sources:
- $9.4B in liquidations over 24 Hours triggers ‘2021 type situation for altcoins’
- Crypto Price Drop Continues: $16B in Longs Liquidated as BTC, ETH Sell-Off Extends
- ‘Largest Ever’ Crypto Liquidation Event Wipes Out 6,300 Wallets on Hyperliquid
- Bitcoin, Ethereum, Crypto News & Price Indexes
- Here’s what happened in crypto today — TradingView News