The evening of October 10, 2025 is a date that will long be remembered in the history of cryptocurrencies as the moment when geopolitics collided with financial leverage in a spectacular explosion. This was not an ordinary price drop. It was a real flash crash on a scale we have never seen before, where the cryptocurrency market lost hundreds of billions of dollars within hours, and a record wave of liquidation of positions on long and short leverage cost over USD 19 billion.
This number, according to data from platforms such as Coinglass and reports from stock exchanges, breaks all previous records, even exceeding the crazy declines during the COVID crash where liquidations reached USD 1.3 billion, FTX also over USD 1.3 billion and LUNA. The result of over PLN 19 billion is terrible and impressive at the same time. Seeing how much this market is changing, we must draw conclusions and remember not to overdo it with leverage. But where does this chaos come from? The answer lies in Donald Trump’s short but devastating tweet, which, like a grenade thrown into a powder magazine, ignited a global trade fire.
Prices collapsed like never before
Imagine that Bitcoin, the king of crypto, which only days earlier flirted with the level of $122,000, suddenly dives below $108,000. That’s a decline of over 12% in one session. Ethereum loses over 17%, falling below $3,700, and altcoins? Disaster and real carnage on the charts. Solana and XRP fall by 20-30%, some DeFi tokens such as AAVE or ADA by even 40%. The entire cryptocurrency market shrank by nearly $280 billion in capitalization, led by BTC, where liquidations reached new records.
It wasn’t a quiet evening – it was a war, with 1.4-1.6 million traders losing everything in a cascading domino effect. Exchanges like HTX and Binance barely kept up, and liquidation tracking platforms like Coinglass temporarily collapsed under the onslaught of data. Stablecoins, these supposedly “stable” anchors, began to wobble, e.g. USDe from the Ethena ecosystem depegged, signaling stress in the ecosystem.
The main reason for the flash crash?
Trump’s tweet – the same one that can shake the world more than an atomic bomb in the era of social media. The US president, in his typical style, published a warning to Beijing on Truth Social (and crossposted on X). ““China has taken an extremely aggressive step by imposing extensive export controls on almost every product it produces, effective November 1, 2025,” Trump thundered. In response? “The United States will impose a 100 percent tariff on imports from China, on top of any existing tariffs, as well as export restrictions on key software. This is not a game – it is a full-scale trade war“.
These words, spoken on Friday afternoon US time, hit the market like a bolt from the blue. Investors, still remembering the escalations of 2018, panicked: technology stocks collapsed, indexes like the Nasdaq lost 3-5%, and cryptocurrencies as high-risk assets were hit the hardest.
But that’s not the end of the drama. The market, in its panic, interpreted Trump’s tweet as a prelude to a full-blown trade war, which triggered an avalanche of speculation. China, in retaliation or self-defense, has started selling its Bitcoin reserves. Reports from Asian media and on-chain analyzes indicate massive BTC airdrops from wallets associated with state institutions. This is not a rumor, but blockchain data shows outflows from Chinese addresses amounting to hundreds of millions of dollars, which further fueled the downward spiral.
As a result, long positions were crushed: as much as 88% of the 19 billion liquidations were longs, mainly at 10x-50x leverage. Short positions did not suffer as much (approximately 1.5 billion), but the market still became a graveyard for dreams of quick profits. One of the whales, according to Lookonchain, made a $192 million profit on shorts opened half an hour before the tweet on the Hyperliquid platform – a classic front-run where insiders get ahead of the chaos.
What conclusions?
Why did it all explode so violently? Cryptocurrencies, despite their “independence”, are today a mirror of global macrotrends. High leverage on perpetual futures exchanges (like Hyperliquid) turned a simple decline into a cascade. One liquidation led to another, oracles (price oracles) glided, and low liquidity reserves in the weekend Asian sessions only made matters worse. Experts from CoinDesk and Bloomberg compare it to a “macro-detonation” – not to domestic meltdowns like Terra, but to the shock of 2020, when the pandemic shook the world. The Fear & Greed Index, this sentimental barometer, first dropped to 54 but today it is much lower, signaling fear, but with a hint of hope for a rebound, as we often go back up from these levels.
Is this the end of the bull market era? Not necessarily. The history of cryptocurrencies is one of cyclical resurrections, and after each flash crash comes a rebound. BTC is already rebounding to USD 113-114 thousand, and analysts from Bitcoin Magazine see this as an opportunity. Trump’s tariffs may paradoxically reinforce the narrative of decentralized assets, free from Chinese supply chains (think rare earth for mining chips). China, losing on trade, may enter even deeper into BTC as a hedge. But the lesson is clear: in a world where a tweet can wipe out billions, leverage is not a sword, but poison.
Finally, a word of encouragement from me. Usually, such a quick flash crash meant the beginning of another bullish trend and I am still optimistic that we will come back for new ATH. Many people on X are already shouting that this is the beginning of a bear market, but in my humble opinion this is exactly what market makers want. Hold tight, HODLers, because sooner or later the storm will pass and cryptocurrencies, like a phoenix, will rise from the ashes.
