On October 10, the digital asset market faced its largest-ever cascade of liquidations, now called crypto Black Friday. In 24 hours, more than $19 billion in leveraged positions were wiped out, marking the largest deleveraging event in industry history.
The sell-off began at the end of the US session after President Trump announced a proposed 100% tariff on Chinese imports, triggering global risk aversion in stocks, commodities and crypto. The sharpest declines occurred in a 25-minute window, as high leverage collided with limited liquidity. According to CoinDesk Reference Rates (CADLI), bitcoin fell to $106,560, ether to $3,551, and solana to $174 as small-cap tokens fell more than 75% during the day.
Market dynamics and extent of deleveraging
According to CoinDesk Data, total open interest in perpetual futures fell 43%, from $217 billion on October 10 to $123 billion on October 11. The largest single-day contraction occurred on Hyperliquid, where open interest decreased by 57%, from $14 billion to $6 billion, as positions were forcibly unwound.
Source: CoinDesk Data
The data suggests that about $16 billion of the $19 billion total came from long liquidations, with almost all traders at 2x or more leverage, with no stop-losses on altcoins being cleared within minutes.
Public blockchains such as Hyperliquid have provided rare and transparent insight into the sequence of forced liquidations, where the liquidation queue and execution can be verified on-chain. In contrast, centralized exchanges aggregate liquidation and liquidation data in batches, meaning that the true scale of forced unwindings may have even exceeded the widely reported $20 billion, as aggregated reports often underestimate notional values.
Source: CoinDesk Data
Structural stress and collapse of the order book
The episode highlighted how closely intertwined liquidity, collateral and oracle systems have become. What started as a macroeconomic-driven pullback quickly turned into a market-wide stress event. As prices breached key liquidation levels, market depth collapsed by more than 80% on major exchanges within minutes.
In some cases, weak order books have caused large-cap assets like ATOM to temporarily post near-zero bids; this does not reflect fair market value, but the withdrawal of liquidity by market makers as risk systems limited activity. With shared collateral across assets and venues relying on local price feeds, feedback loops have amplified volatility in the ecosystem. Even well-capitalized platforms proved vulnerable once liquidity evaporated across the board.
Fair value measurement during periods of volatility
When prices at the exchange level become erratic, CoinDesk reference rates such as CCIX and CADLI act as stabilizing mechanisms. These multi-site benchmarks aggregate prices from hundreds of sources, applying quality filters and rejecting outliers to produce an overall fair value based on consensus.
During the volatility of Black Friday, benchmark rates revealed that market-wide valuations remained far less extreme than some location-specific data suggested. This transparency allows market participants to distinguish between true repricing and localized dislocation, thereby providing a neutral benchmark for evaluating post-trade performance.
Reference rates don’t stop volatility, but they define it, ensuring that traders, funds and exchanges have reliable data in the event of a market breakout.
Final Thoughts
The severe market disruption has shown how leverage, liquidity and infrastructure fragmentation can converge into a feedback loop that overwhelms even the largest trading platforms. It also revealed the limits of transparency in a system where some blockchain exchanges, like Hyperliquid, expose liquidation flows in real time, while centralized venues still operate as partial black boxes.
The maturity of crypto will be defined by how it internalizes these shocks. Better risk controls, unified warranty standards and real-time transparency will be just as important as the use of pricing benchmarks. CoinDesk benchmark rates help confirm fair valuations when screens turn red, but true resilience depends on exchange architecture, deeper order books, more robust Oracle design, and ultimately exchange availability.
The industry now faces a choice between treating this event as an isolated event or as a model for building a market capable of absorbing the next one.
