A Year After the 10/10 Flash Crash, Leverage Still Rules
One year after more than $19 billion of leveraged crypto bets were wiped out in a day, bitcoin and ether order books are deeper than before the crash, but altcoin liquidity has kept shrinking and analysts say the leverage behind the collapse never left.
The 10/10 flash crash turned one year old on Saturday, and the market it left behind is deeper but not calmer. Bitcoin and ether order books now hold more resting liquidity than on the day of the crash, CoinDesk Research found, while altcoin depth and spot trading have not recovered and leverage still drives short-term prices.
What happened
On October 10, 2025, President Donald Trump announced 100% tariffs on Chinese imports, and what followed was the largest liquidation event crypto has recorded. Bitcoin.com News, citing Coinglass data, said more than $19 billion of positions held by 1.6 million traders were liquidated over October 10 and 11. About $3.21 billion was liquidated in a single minute at 21:15 UTC, bitcoin fell from $122,574 to $104,782, and total perpetual futures open interest dropped 43% in a day, from $217 billion to $123 billion.
Bitcoin has not reclaimed its peak since. It traded near $82,700 when Bitcoin.com News published its anniversary review, roughly 34% below the $126,080 record set on October 6, 2025.
Yet the market's plumbing has partly healed. CoinDesk Research measured depth, the value of buy and sell orders resting near the current price, on four dates. On October 7, about $11.7 million sat within 1% of bitcoin's price, roughly 75% more than on crash day and up from about $9 million at the start of 2026 and $6.9 million at the start of 2025. Ether's depth within 0.5% of the price more than doubled from crash day to about $4.2 million. "The majors' deepening is real capital, not a price effect," CoinDesk researcher Saksham Diwan said.
Why it matters
The recovery is narrow. In CoinDesk's altcoin basket, depth at 5% from the price fell about a third from the start of 2025 to around $2 million. Weekly spot volume on centralised exchanges averaged about $279 billion over the four weeks to September 27, nearly two-thirds below the $801 billion traded in the crash week, although it has doubled from an August low of around $135 billion. "Market makers have returned to majors, with liquidity above pre-crash levels, whilst altcoin liquidity continues to trend down as a whole," said Joshua de Vos, CoinDesk's research lead, who expects that divergence "to persist into next year."
The bigger lesson of the 10/10 flash crash is that leverage was the trigger, and it is still here. "The movement was obviously not onchain data. I mean, it was all derivatives," Mark Connors of Risk Dimensions told CoinDesk. "There's still a chance that you can have an October 10th for sure. The levered products have not gone away." Bitcoin.com News pointed to repeat flushes this year, including a February 1 episode that erased about $2.2 billion of positions in 24 hours, and this week's slide to a month-to-date low of $80,308. Ether had its own flush this week, as our report on ether liquidations of $1.19 billion showed, after bitcoin fell below $83,000 on oil and bond yield moves.
Connors said the 10/10 flash crash also undermined faith in bitcoin's four-year cycle as a reliable guide. "The four-year cycle is not dead; it has changed," he said, adding that a year later traders have "learned to be more attentive to market structure." His summary: "The market did bend; it didn't break." Chris Sullivan, co-founder of Hyperion Decimus, told CoinDesk that traders can protect themselves by watching open interest, funding rates and sentiment for signs that the market is leaning too far in one direction.
What's next
Deeper books should help bitcoin and ether absorb large orders, but the test came quickly: bitcoin's 1% depth fell about 12% between October 7 and October 8 as prices dropped, CoinDesk said. Watch funding rates, open interest and whether altcoin liquidity keeps thinning.
The call
Ether is the cleanest live test of whether fragile positioning gives way again this month. Bitcoin.com News' price bar showed ether near $2,505 when its anniversary piece went up on Saturday. On Polymarket's "Will Ethereum dip to $2,400 in October?" market, Yes traded at 68.5% when we checked at 05:29 UTC on 2026-10-11, on about $76,871 in volume. It resolves Yes if any one-minute Binance ETH/USDT candle in October has a low at or below $2,400.
Our call follows the market favourite: Yes, ether touches $2,400 or lower on Binance before October ends. We will score it on November 1. This is a dated market call for the Called It record, not trading or investment advice.
This article is for information only and is not investment advice. Calls are editorial forecasts, logged with market odds at the time of publication and kept on the record.