2026-10-11

Bitcoin Fell Below $81K Right Around the 10/10 Crash's First Anniversary - Why Liquidations Were 18x Smaller This Time

Written & reviewed by the TradeSmrt editorial team · 2026-10-11

In this article

What Happened
Why the Same Trigger Produced an 18x Smaller Cascade
What to Take Away From This
FAQ
Sources

What Happened

Bitcoin slid back toward $80,000 last week, almost exactly one year after crypto's most infamous single day. On Thursday, October 8, BTC dipped to an intraday low near $80,300 as Brent crude pushed above $100 a barrel, reviving inflation worries and triggering a wave of forced liquidations among leveraged longs. It clawed back into the low-$83,000s by Friday morning, October 9 - only for President Trump to post on social media around 11 a.m. ET that day threatening an additional 100% tariff on Chinese goods. Wall Street's reaction was severe: U.S. stocks shed roughly $2 trillion in market value in a single session (see our companion article on the stock-market fallout), and crypto didn't escape the tremor either. Liquidations over the 24 hours through October 9 totaled an estimated $1.19 billion by one tally, with a separate CoinGlass-sourced measure putting the figure at about $1.09 billion. By early Saturday, October 10 - measured in the 24 hours ending roughly 2:55 a.m. ET - liquidations had calmed dramatically to just $91.63 million. That calming happened to land right on the one-year anniversary of the largest single-day liquidation event in crypto history.

Rewind exactly 365 days, and the parallel is almost eerie. On October 10, 2025, Trump made the identical threat - a 100% tariff on Chinese goods. Bitcoin cratered from a Friday high of $122,574 to as low as $104,782 within a matter of hours, a drop of more than 14%. The forced unwind that followed wiped out roughly $19 billion in leveraged positions across exchanges and decentralized platforms worldwide - some tallies put the figure closer to $20 billion - liquidating more than 1.6 million trading accounts in the process. It remains, to this day, the single largest liquidation event crypto markets have ever recorded. Altcoins bore the worst of it: on at least one exchange, a token like ATOM briefly plunged from roughly $4 to $0.001 as thin order-book liquidity distorted prices in a feedback loop.

A year later, Bitcoin still trades more than 30% below its all-time high. According to Bloomberg's anniversary analysis (syndicated via Yahoo Finance), Bitcoin-linked perpetual futures open interest stood at roughly $45 billion a year ago, per CryptoQuant data - and it more than halved within six months of the crash. Bitcoin's recent bounce back above $80,000 has restored some confidence, Bloomberg noted, but open interest in the largest token remains well off that prior peak.

Why the Same Trigger Produced an 18x Smaller Cascade

The most striking part of this story isn't that history rhymed - it's how differently the market absorbed an almost identical shock. Both years featured the same catalyst: a Trump social-media post threatening 100% tariffs on China, and a same-day stock market selloff. Yet the scale of the crypto damage diverged enormously - $19 billion in 2025 versus roughly $1.1 billion in 2026, an 18-fold difference by rough math. The explanation has less to do with the news itself than with the market's underlying structure in the weeks leading up to each event.

The key variable is how much leverage had built up beforehand. Heading into October 10, 2025, Bitcoin perpetual futures open interest sat around $45 billion, the product of months of steadily accumulating leveraged positions across the market. That buildup functioned like dry kindling: once prices moved sharply in either direction, forced liquidations had plenty of fuel to cascade through the system. What actually unfolded wasn't a simple price decline but a self-reinforcing feedback loop - one liquidated position dumped more supply onto the market, pushing prices down further, which in turn triggered the liquidation thresholds of the next batch of leveraged bets. That mechanical cascade was compounded by a structural weakness at several centralized exchanges, where price oracles relied solely on each venue's own order book. Thin liquidity on any single exchange could distort the local price, and that distorted price then got fed back into other platforms' liquidation engines, amplifying the damage further.

This time around, that fuel simply wasn't there in the same quantity. Open interest had fallen to less than half its pre-crash level within six months of the 2025 event, and - as Bloomberg's reporting emphasized - traders have been slow to rebuild leveraged positions back toward anything resembling the old peak. With less leverage stacked in the system, there was mechanically less to force-liquidate when prices dropped. It's also worth noting that this year's shock wasn't a single isolated trigger: oil's move above $100 a barrel had already been thinning out leveraged long positions a full day before Trump's tariff post arrived, meaning a meaningful share of the "weak hands" had already been shaken out before the second catalyst even hit. That sequencing may have further dampened the size of the follow-on cascade.

None of this means the market has become risk-free. Caladan's Julia Zhou told Bloomberg that liquidity remains highly fragmented and can still deteriorate rapidly. Galaxy Digital's Lucas Tcheyan put it more bluntly: the market that crashed on 10/10 doesn't really exist anymore - the one that has replaced it is only just starting to get priced in. That shift is visible in where leverage is migrating: open interest in real-world-asset perpetual futures, per DefiLlama data, has already climbed past $17 billion, with much of that growth concentrated on newer platforms like Hyperliquid. Leverage hasn't vanished from crypto markets - it may simply be relocating away from the Bitcoin- and Ethereum-centric exchange structure that cracked a year ago.

What to Take Away From This

The same headline can produce wildly different market outcomes depending on how much leverage was already stacked up beforehand. Both 2025 and 2026 were triggered by the identical catalyst - a Trump threat of 100% tariffs on China - yet liquidations differed by a factor of roughly 18x. The news itself matters less than the market structure it lands on.
Open interest is a leading indicator worth watching as closely as price charts. When leverage has been quietly accumulating, even a calm-looking market can be set up for an outsized chain reaction from a relatively modest shock. When open interest stays compressed, markets tend to absorb similar-sized bad news far more smoothly.
Don't underestimate how long markets take to "detox" after a major liquidation event. Open interest more than halving within six months of the 2025 crash shows that rebuilding leverage back to pre-crash levels is a slow process - and during that stretch, even sharp price drops are less likely to reproduce the scale of damage seen a year earlier.
Leverage that disappears from one venue can simply resurface somewhere else. The rapid growth of real-world-asset perpetual futures past $17 billion in open interest is a reminder that the next shock might originate from an entirely different corner of the market than the one that broke last time.

FAQ

Why did nearly identical Trump tariff threats on China happen in both October 2025 and October 2026?

Both episodes emerged during periods of rising US-China trade tension, with similar underlying friction points such as export controls. There's no established "seasonal" pattern guaranteeing these flare-ups recur every October - it appears more likely that negotiations between the two countries have simply tended to reach a boiling point around similar calendar windows in back-to-back years.

Why does falling open interest matter for everyday crypto investors?

Open interest measures the total value of leveraged positions still outstanding in the market. When it's high, a sharp price move is more likely to trigger a chain reaction of forced liquidations that amplifies the initial move. When it's low, as it was heading into this October, the market has less "fuel" available to cascade, so similar-sized shocks tend to produce milder price swings.

Does a smaller liquidation event this year mean Bitcoin is now safer from crashes?

Not necessarily. Market participants quoted by Bloomberg, including analysts at Caladan and Galaxy Digital, cautioned that liquidity remains fragmented and can deteriorate quickly. There are also signs that leverage is migrating toward newer platforms and asset classes, such as real-world-asset perpetual futures, which means the location and shape of the next potential shock remain hard to predict.

Sources

This article is an original synthesis and analysis based on the following reporting; it does not reproduce any source's text.

This article is for informational and educational purposes only and does not constitute investment advice. All investments carry risk, including the potential loss of principal. Past performance and historical patterns do not guarantee future results. Always do your own research and consult a licensed financial advisor before making investment decisions.