Bitcoin’s surge to $101,000 wipes out $7 billion in leveraged positions

On October 10th, a sudden flash crash shook the cryptocurrency market, causing Bitcoin, Ethereum, and other major tokens to plummet before making a partial recovery, wiping out billions of dollars in leveraged positions.

Bitcoin fell more than 10% at its lowest point, dropping to $101,500, before rebounding and trading around $112,500 at the time of writing.

Ethereum similarly fell over 10% during the day before stabilizing above $3,800. Major altcoins suffered significant losses, including Solana and Dogecoin, which fell over 30% and 50%, respectively.

While Solana is still trading below the key benchmark of $200, DOGE has experienced a rapid recovery and is trading above the $0.18 support level at the time of writing.

The economic downturn was triggered by a flood of sell orders through the futures market, forcing widespread liquidations in already fragile market conditions as geopolitical tensions between the U.S. and China escalated.

A wave of forced selling exacerbated volatility further, evaporating liquidity across major trading pairs. As of this writing, more than $7 billion in long and short positions have been liquidated during the whiplash price swings.

The crash highlighted the structural vulnerabilities of the crypto market, where high leverage and concentrated liquidity amplify sudden price shocks. Bitcoin’s order book quickly thinned and the price skyrocketed before buyers stepped in to absorb the move.

Despite the rebound, traders remain cautious. Bitcoin faces important support near $110,000, while Ethereum needs to hold in the $3,800-$4,000 range to prevent further downward pressure.

Market participants are also closely monitoring open interest levels and whale activity for signs of new stabilization or further stress. The event was a sharp but potentially healthy reset that flushed out excess leverage after months of speculative accumulation.

But the flash crash served as a reminder of how quickly sentiment can reverse in digital asset markets, where algorithmic trading and leverage can turn routine corrections into rapid system-wide declines.

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