A massive $19 billion liquidation event rocked cryptocurrency markets on October 10, with Galaxy Digital CEO Mike Novogratz attributing the sharp selloff to excessive leverage, particularly on the Binance exchange. Novogratz stated the cascade was driven by margin calls and derivatives unwinds, not by broader macroeconomic news.
Approximately 70% of the $19 billion in liquidated positions occurred within a frantic 40-minute window, highlighting the speed and intensity of the move. Novogratz explained that heavy leverage created a "feedback loop" where initial price declines triggered forced selling, which thinned liquidity and pushed prices lower even faster. "When leverage stacks up in one direction, it doesn’t take much to tip the domino," he remarked, describing the damage as mechanical rather than fundamental.
Separately, on-chain data reveals Bitcoin recently experienced its largest short liquidation event since September 2024. Analyst Darkfost from CryptoQuant noted that over $736 million in Bitcoin short positions were wiped out in a significant short squeeze, second only to the $773 million event in late 2024. This squeeze was preceded by deeply negative funding rates, indicating a high concentration of bearish bets.
Darkfost pointed out the current market fragility, where the derivatives market is heavy with speculative positioning while the spot market suffers from thin liquidity. This imbalance means aggressive shorts can amplify upside volatility if squeezed, but sustained price rallies require stronger spot market demand. At the time of reporting, Bitcoin's price was around $69,878, still down approximately 45% from its all-time high of $126,080.
