Was the October 10 Crash Overstated? Analyst Reveals True Crypto Losses at $2.31B
An analysis of recent market activity suggests that the reported $19 billion loss during the October 10 crash was inflated, revealing actual trader losses to be around $2.31 billion.
Last week’s market plunge was deemed the worst ever in crypto history, igniting reports of $19 billion loss from leveraged positions. However, recent analysis indicates that the real losses were much smaller, potentially reshaping how this incident is viewed in the market’s timeline.
The On-Chain Perspective
According to CryptoQuant, the often-reported figure of $19 billion actually represents the cumulative size of closed leveraged positions, not the tangible losses for traders. Analyst Carmelo Alemán explains that liquidations occur when exchanges terminate a leveraged position due to insufficient margin.
“Leverage amplifies gains and losses both: when prices are favorable, profits increase; when not, the risk of liquidation rises dramatically,” said Alemán.
The breakdown of overall losses showcases that Bitcoin long positions accounted for $1.05 billion, while shorts lost $133.6 million. Ethereum long liquidations reached $895 million, whereas short liquidations sat at $229.7 million.
Consequently, the total losses for October 10 sum up to about $2.31 billion, much lower than the record $3.09 billion experienced on April 18, 2021.
“The $19B tally is merely the nominal value of leveraged positions, not actual losses sustained by traders,” stated Alemán. “On-chain analysis reveals a significant correction, but far from the historic levels seen during the Covid crisis.”
Initial fears were valid, with over 1.6 million traders having their positions liquidated as Bitcoin’s price fell from over $122,000 to close to $101,000 due to escalating trade tensions between the United States and China.
A Market Adjustments Ahead
Despite the tumult, some experts view the incident as a crucial market reset. Analyst Doctor Profit categorically stated it was a “perfectly executed trade” that cleared out excessive leverage that was earlier disrupting balance in the market.
Market analytics firm Glassnode shares this sentiment, observing that the deleveraging has altered short-term sentiment and lessened speculative trading, with enhanced stability emerging in crucial trading metrics that had previously indicated exuberance.
Furthermore, while derivatives have seen contraction, capital from sources like spot Bitcoin ETFs remains, offering a base for upward recovery. The market seems to be entering a consolidation phase, gradually rebuilding confidence and detaching from the aftermath of the October 10 panic.
