In 2025, forced liquidations across the crypto derivatives market reached roughly $150 billion, based on CoinGlass data. While that number sounds extreme, it mostly reflects how risk is managed in a market dominated by derivatives rather than signaling any kind of systemic breakdown. For context, total crypto derivatives trading volume for the year was about $85.7 trillion, showing that liquidations are a built-in feature of how these markets operate.
The biggest liquidation event occurred during the October crash, which was sparked by a macro shock. President Donald Trump’s announcement of 100% tariffs on Chinese imports, along with potential export restrictions, sent global risk assets sharply lower. In crypto, this move wiped out heavily leveraged long positions as margin requirements were breached. Between October 10 and 11 alone, more than $19 billion in positions were liquidated, with the majority coming from bullish trades.
Auto-deleveraging (ADL) made the situation worse, particularly in thinner mid-cap and long-tail markets. What were meant to be hedges ended up turning into real losses as liquidity dried up. Bitcoin and Ethereum fell around 10–15%, while many smaller tokens saw 50–80% collapses in their perpetual contract prices. Heavy reliance on a small number of major exchanges further amplified the forced selling, putting stress on trading infrastructure and cross-exchange strategies.
This episode highlights a key reality of today’s crypto market: in a derivatives-driven environment, liquidations aren’t just a punishment for excessive leverage. They are a structural mechanism that can significantly amplify stress when macro conditions turn hostile. Even so, the market continued to function, with open interest resetting and risk being repriced—underscoring both the resilience of the system and the clear limits of leverage and concentrated market structure.
