On October 10, 2025, the cryptocurrency market experienced what is now being called the biggest liquidation event in the history of trading. Since the dump, crypto natives have been looking for answers, and a common theme has been suspicion of centralized exchanges.
Stakeholders and commentators have linked the recent volatility to broader financial market jitters, not unlike the sell-off that rocked US stock markets. However, the speed and scale of the impact on the crypto market have amplified suspicion.
Speculations on what caused the crash
“Word on the street is that big CEX’s auto liquidation of collateral tied to cross margined positions is why lots of alts got smoked on the move down,” Arthur Hayes wrote on X. “Congrats to all you stink bidders. We won’t be seeing those levels any time soon on many high quality alts.”
Another influencer referred to an event that Cryptopolitan reported on Friday, when a whale opened short positions on BTC and ETH two days ahead of the market bloodbath.
The wheels were finally set in motion after Trump’s declaration on October 10, but the market only dipped slightly; nothing too major. Then, a few hours later, a podium announcement seemingly declared trade war on China, causing panic.
“Starting November 1, the United States will impose a 100% tariff on all Chinese imports,” the declaration said and within minutes, the S&P 500 dropped over 2%, Bitcoin plunged to $104K, Ethereum crashed to $3,574 and altcoins bled 60–90%, all culminating in almost $1T in crypto market cap wiped in under 3 hours.
The influencer noted how suspicious the timing was; Thirty minutes before Trump made the official announcement, the same whale doubled its short exposure, and when the crash hit, those positions were closed for an estimated $200M profit.
“Too perfect to be a coincidence,” wrote the influencer, who remains convinced that this value extraction would not start a bear market. According to him, it was a purge, and that is characteristic of bull markets — just before they move up another massive leg.
While Trump’s tariffs may have triggered the cascade, what comes now could fuel the next expansion or kill it.
Other theories circulating on the internet are linked to insider trading and “engineered liquidations” fueled by on-chain data, and political timing.
For now, these claims are more speculative than proven, but they echo the long-standing factors like thin liquidity and whale dominance that made some steer clear of crypto in the early days.
Are we in a bear market?
First off, it should be noted that the present circumstances do not fit the criteria of past bear markets. However, immature reactions could trigger bearish continuity, threatening past gains.
The volatility was triggered in large part by the latest round of tariffs from US President Donald Trump, only days after BTC made a new all-time high.
Trump announced on Friday that he would impose an additional 100% tariff on China and export controls on software, causing prices to tumble at a time the market was already showing weakness.
Bitcoin, which had touched above $125,000 earlier this week, dipped as low as $104,000 on Saturday before hovering around $112,000 as of publication time.
The fall may not look like much, but over the past 24 hours, over $19 billion worth of bets were wiped out, and more than 1.6 million traders got liquidated, according to Coinglass data. More than $7 billion of those positions were reportedly closed in less than an hour of trading on Friday.
Coinglass suspects the total might be much higher since exchanges don’t necessarily report such orders in real time. Binance, for example, only reports one liquidation order per second, the post claims.
“The focus now turns to counterparty exposure and whether this triggers broader market contagion,” said Brian Strugats, head trader at Multicoin Capital, before adding that some estimates place total liquidations above $30 billion.
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