On October 10, nearly $20 billion in leveraged crypto positions were wiped out in the largest dollar-value liquidation on record. Was it caused by misunderstood Chinese policy, whale games, or simply the structural fragility of crypto itself?

 

When Bitcoin plunged below $110,000 on October 10 and altcoins followed, the fallout was brutal: nearly $20 billion in leveraged positions were liquidated in less than 24 hours. It was the largest liquidation event by dollar value in crypto’s history, sparking a familiar debate. Was this a story of miscommunication and misunderstanding, market manipulation by whales, or just another case of crypto being crypto?

 

Miscommunication: China’s Rare Earth Shock

The event came just as China announced expanded rare earth export controls, restricting not only raw minerals but also certain processing technologies critical to semiconductors, defense, and renewable energy. Officials stressed that this was not a full export ban and that many civilian uses would remain licensed. But in the fog of fast headlines, nuance was lost. Traders interpreted the move as a dramatic chokehold on global supply chains, fueling a risk-off reaction that bled into crypto markets.

 

Manipulation: Exploiting Panic

For many observers, the timing was too perfect. Crypto derivatives markets are transparent — whales can see where liquidation clusters sit and, in thin liquidity, it doesn’t take much to push the market into those zones. With rare earth headlines dominating the narrative, opportunistic players may have shorted aggressively, triggered forced selling, and then covered at lower levels. Whether provable or not, the pattern of “liquidation hunting” under cover of macro news is a familiar one in this space.

 

Over-Leverage and Thin Liquidity: The Dry Tinder

Even without miscommunication or manipulation, crypto was already fragile. Leading into October, open interest in Bitcoin futures had climbed sharply, and funding rates revealed crowded long positions. Add thin liquidity during the Asian session, and the market was primed for a cascade. Once BTC slipped into liquidation zones, forced sells and margin calls amplified the move across the entire market.

 

The Convergence

In reality, the October 10 wipeout was the convergence of all three factors:

 

• Miscommunication over China’s policy spurred panic.

• Whales likely weaponized the headlines to hunt leveraged positions.

• Over-leverage and structural fragility guaranteed that once the dominoes fell, they fell hard.

   

 

 

Lessons Learned

The takeaway is less about choosing which factor “caused” the crash and more about understanding how macro shocks, manipulation, and crypto’s design flaws intersect. Until leverage is better managed, liquidity deepens, and communication improves at the policy level, events like this will continue to punctuate crypto’s story. The October 10 liquidation event wasn’t just “crypto being crypto.” It was a perfect storm where miscommunication, manipulation, and structural fragility collided — and it’s a reminder that in this market, volatility is not the exception but the rule.

In the bustling heart of New York City, a courtroom drama of epic proportions is unfolding, and the eyes of the world are fixed upon it. This high-stakes trial involves none other than Sam Bankman-Fried, the prominent figure in the cryptocurrency world. And bringing you the latest live updates from the frontlines is none other than the intrepid journalist, Tiffany Fong.

Caroline Ellison's Shocking Testimony

Today marked a pivotal moment in the trial as Caroline Ellison, one of Sam Bankman-Fried's top deputies and his former romantic partner, took the stand. The revelations that poured forth during her testimony sent shockwaves through the courtroom and the entire cryptocurrency community.

Ellison, who once oversaw the day-to-day operations at Alameda Research, a crypto trading firm controlled by Bankman-Fried, made some truly startling admissions. She testified that she was, in fact, directed by Bankman-Fried himself to engage in a series of financial misdeeds. Among her shocking claims, Ellison asserted that Alameda Research had taken a jaw-dropping $14 billion from FTX customers to repay debts accrued by the company.

A Trailblazing Reporter on the Scene

In the midst of this riveting courtroom drama, one journalist stands out for her dedication and commitment to delivering the latest updates straight from the scene. Tiffany Fong, the dynamic and fearless reporter, has positioned herself in the heart of the action. Despite the trial's non-televised nature and strict restrictions on electronic devices, Tiffany Fong is on the frontlines, ensuring that you don't miss a single development.

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As this trial continues to captivate audiences worldwide, Tiffany Fong's reporting is your go-to source for real-time insights and in-depth analysis. Her dedication to delivering accurate and up-to-date information is nothing short of commendable. While other news outlets might be playing catch-up, Tiffany Fong is ahead of the curve. https://twitter.com/TiffanyFong_