Bitcoin's $19bn liquidation crash: leverage risks persist a year on

Key points

• Bitcoin fell from about $122,000 to $105,000 on 10 October 2025, days after a record above $126,000.
• The crash triggered roughly $19bn in liquidations across crypto markets.
• Mark Connors of Risk Dimensions says levered products have not gone away and another such day is possible.

A year after Bitcoin's October 2025 flash crash, the leverage risks behind the $19bn liquidation event have not gone away, CoinDesk reports. Bitcoin had hit a record above $126,000 just days earlier, then fell from around $122,000 to $105,000 on 10 October 2025, with much of the drop inside minutes.

Open interest was near historic highs before the crash, with traders piled into bullish bets tied to Bitcoin's four-year cycle. He said the move was driven by derivatives rather than onchain data, and that paper Bitcoin still governs the near term.

Perpetual futures remain a major part of crypto trading, and exchanges have strong incentives to keep offering leveraged products. Connors said market structure data has improved, giving better visibility into order books and positioning. Chris Sullivan of Hyperion Decimus advised avoiding leverage, watching open interest, funding rates and sentiment, and holding long-term coins in self-custody.

Connors said the four-year halving cycle has changed and offers less signal than before, with economic and political forces possibly mattering more. Institutional products have done little to displace derivatives' influence on short-term prices. He said the market bent but did not break, and that traders are now more attentive to market structure.

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