Digital asset markets faced the largest liquidation cascade in history on October 10th. virtual currency black friday. Within 24 hours, more than $19 billion in leveraged positions were eliminated, making it the largest deleveraging event in industry history.
The decline began in late U.S. trading after President Trump announced proposed 100% tariffs on imports from China, sparking global risk aversion across stocks, commodities and cryptocurrencies. The steepest decline occurred within 25 minutes as high leverage collided with thin liquidity. Bitcoin fell to $106,560, Ether to $3,551 and Solana to $174, with the small-cap tokens down more than 75% during the day, according to CoinDesk Reference Rates (CADLI).
Market trends and scale of deleveraging
Total open interest in perpetual futures fell by 43%, from $217 billion on October 10 to $123 billion by October 11, according to CoinDesk Data. The biggest contraction of the day occurred in HyperLiquid, where open interest fell 57% from $14 billion to $6 billion as positions were forced to unwind.
Source: CoinDesk data
According to the data, about $16 billion of the total $19 billion came from long-term liquidations, with nearly all traders leveraging more than 2x and altcoins without stop losses disappearing within minutes.
Public blockchains such as Hyperliquid have allowed for rare transparent observations of a series of forced liquidations, allowing on-chain verification of liquidation queues and execution. By contrast, centralized exchanges aggregate data and clear in batches, meaning that grouped reporting often understates the notional amount, meaning the actual size of the forced unwinding could even have exceeded the widely reported $20 billion.
Source: CoinDesk data
Structural stress and order book collapse
This episode highlighted how closely linked liquidity, collateral, and oracle systems are. What started as a macro-driven unwind quickly evolved into a market-wide stress event. Within minutes, market depth collapsed by more than 80% across major exchanges once the price broke through the major liquidation level.
In some cases, the thin order book saw large assets like ATOM temporarily register near-zero bids. This is not a fair market value, but rather reflects market makers withdrawing liquidity as the risk system has curtailed activity. Feedback loops amplified volatility across the ecosystem, as collateral was shared across assets and venues relying on local price feeds. Even well-capitalized platforms proved vulnerable when liquidity evaporated across the board.
Fair value pricing in volatility
When exchange-level pricing becomes volatile, CoinDesk reference rates such as CCIX and CADLI act as a stabilizing mechanism. These multi-venue benchmarks aggregate prices from hundreds of sources and apply quality filters and outlier removal to generate a global consensus-based fair value.
Amid the volatility of Black Friday, reference rates reveal that overall market valuations are not as extreme as venue-specific print may suggest. This transparency allows market participants to distinguish between genuine repricing and localized fluctuations, and provides a neutral basis for post-trade performance evaluation.
Reference rates don’t stop volatility, but they define it and ensure that traders, funds, and exchanges have reliable data when the market collapses.
lastly
Severe market disruptions have shown how leverage, liquidity, and fragmented infrastructure can converge into feedback loops that can overwhelm even the largest trading venues. It also exposed the limits of transparency in a system where centralized exchanges still function as partial black boxes, while some on-chain exchanges, such as Hyperliquid, expose clearing flows in real time.
Cryptocurrency maturity will be defined by how it internalizes these shocks. Better risk management, uniform collateral standards and real-time transparency are just as important as the use of price benchmarks. CoinDesk’s reference rates help ensure a fair valuation when the screen goes red, but true resiliency depends on the exchange’s architecture, deeper order books, more robust oracle design, and ultimately the exchange’s uptime.
The industry now has to choose between treating this as a singular event or as a blueprint for building a market that can absorb the next one.