Fresh analysis from Cointelegraph Research and Rena Labs has uncovered critical details about the October 10 crypto market crash, now confirmed as one of the largest liquidation events in digital asset history, wiping out over $19 billion in leveraged positions across major exchanges. The crisis was primarily driven by Binance's reliance on its internal pricing mechanism for key collateral assets—including USDE, bnSOL, and wBETH—instead of external oracle-based feeds, leading to severe mispricing that rippled through derivatives markets.
According to the report, the collapse unfolded in four distinct stages: initial liquidity loss, equilibrium collapse, liquidation cascade, and capitulation. Orderbook data from Rena Labs showed a 97% loss of market depth in the USDE/USDT trading pair, with the stablecoin's price plunging to $0.68 and breaking its dollar peg. This triggered a chain reaction of forced liquidations, where both long and short positions were flushed out within minutes, amplifying volatility across altcoin markets.
Specific liquidation totals highlighted USDE at $346 million, wBETH at $169 million, and bnSOL at $77 million. Liquidity in the USDE/USDT pair collapsed from an average of $89 million to just $2 million between 21:40 and 21:55 UTC, with bid-ask spreads widening to 22%. Trading volume spiked by nearly 900 times, and trade frequency reached 3,000 orders per minute, with 92% of trades being sell orders from liquidations and panic selling.
Rena Labs' anomaly detection engine recorded 28 trading anomalies before the crash—four times the usual—including irregular patterns and order sequences consistent with spoofing. Researchers warned that Binance's internal pricing created a feedback loop of inaccurate collateral valuation, undermining risk management and exposing systemic vulnerabilities in synthetic dollar and wrapped-asset markets. The event has sparked renewed debate among institutional traders and regulators, accelerating calls for independent price feeds and stricter governance to prevent future failures.
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