What happened?
Bitcoin (BTC) experienced a significant drop to 12-day lows below $115,000, causing over $1 billion in liquidations within a span of 20 minutes. This marks the largest cascade of liquidations for the year 2025. The sudden decline in price led to total liquidations worth about $1.7 billion in an hour, with the majority ($1.01 billion) coming from long positions due to margin calls triggered by overleveraged traders.
Who does this affect?
This major shift primarily impacts traders who had heavily leveraged long positions concentrated within the $113,000-$114,000 price range, where maximum risk exposure was accumulated. The crash caused these traders to face substantial losses as over $100 million in long positions were wiped out when the price dropped under $115,000. Institutional flows remained positive despite the upheaval, with $1.9 billion entering digital asset investment products the previous week.
Why does this matter?
The sudden crash and subsequent liquidation have considerable market impact. They have cast doubt on Bitcoin’s traditionally bullish October performance – “Uptober” – and significantly undermined market optimism. The event also acts as an alert, forcing overleveraged traders to reassess their positions and strategies. However, some market analysts view this as a necessary market correction, clearing the path for potential rallies in the fourth quarter.