In October, exchanges forcibly closed positions worth more than $12.5 billion on the crypto market. This is one of the most destructive months for leveraged trading. The market's usual "Uptober" turned into "Rektober."
A liquidation is the forced closure of a position by an exchange when a trader's collateral is no longer enough to cover the loss. The larger the leverage, the smaller the price move needed to wipe out the account.
For a trader, this is not someone else's statistic. Such a volume of forced selling changes price behavior for everyone who is in the market at that moment.
Who lost more?
The breakdown is simple and telling. The skew toward buyers is immediately visible.
- $9.21 billion - long positions, that is, bets on growth
- $3.29 billion - short positions, bets on a decline
- Almost three quarters of all the money wiped out belonged to those who were buying
Why were the longs hit?
The market spent the whole month moving up and getting it wrong. Traders bought on expectations of growth, while the price moved against them.
Each pullback swept up collateral in whole layers. Hence the sum that no one believed at the start of the month.
What does this mean for a trader?
$12.5 billion is not someone's abstract loss. It is the volume of forced selling that itself accelerates the move.
The main point: when leveraged positions are closed in a cascade, the price passes through levels faster than a manual stop can trigger. Slippage in such moments is the norm, not a glitch.
If you trade crypto on news, keep the economic calendar at hand and calculate the risk per trade in advance.
What happens next?
Overall leverage in the market has shrunk. After a month like this, that usually reduces the amplitude of sharp candles.
- Leverage recovers gradually. While this is happening, the market remains sensitive to any large order.
- The order book has become thinner. The crypto market is starting November with a noticeably thinner book than in October.
If you want to trade crypto with someone else's capital and fixed risk limits, choose a challenge to match your style.
Did you get caught in one of these liquidations?
Over the month, the market wiped out $9.21 billion in long positions. The question is no longer about entry precision. The question is how much you can lose before the position is closed without you. Prop trading is structured so that the trading nominal and risk limits are set by the company: you pass its selection, trade by its drawdown rules, and share the result. This is a different risk-management logic than manual leverage on your own deposit, and it is worth understanding before the next cascade.