Last week’s market downturn has been widely labeled as the worst ever in the history of crypto, with multiple media reports citing a staggering $19 billion wiped from leveraged positions.
But new on-chain analysis is challenging this story, showing that the real losses for traders were much lower than that, and possibly changing the event’s place in market history.
The On-Chain Reality
According to CryptoQuant, the widely reported $19 billion figure is the nominal value of leveraged positions that were closed, not the actual money traders lost.
Analyst Carmelo Alemán explained that liquidation happens when an exchange forcibly closes a leveraged position because the trader’s initial margin is exhausted. However, the $19 billion, sourced from CoinGlass, reflects the total size of these leveraged bets, not the money investors actually had on the line.
“Leverage magnifies both gains and losses: when the price moves favorably, profits multiply; when it moves unfavorably, the liquidation risk increases exponentially,” stated Alemán.
The expert broke down the real losses, citing on-chain data that showed for Bitcoin, long positions lost $1.05 billion while short positions lost $133.6 million. Meanwhile, long liquidations made up $895 million for Ethereum, while short liquidations made up $229.7 million.
When combined, the total losses for traders on October 10 amount to about $2.31 billion, a figure notably lower than the record set on April 18, 2021, which saw total liquidations of $3.09 billion.
“The reported $19B corresponds to the nominal value of leveraged positions, not actual trader losses,” wrote Alemán. “On-Chain data shows a strong correction—but far from the historic Covid-era event.”
The initial panic was understandable, with more than 1.6 million traders seeing positions closed as the price of Bitcoin fell from over $122,000 to nearly $101,000 on some platforms, triggered by trade tensions between the United States and China.
A Market Reset and Path Forward
Despite the painful unwind of positions, some observers have interpreted last week’s occurrence as a necessary market correction. Pseudonymous analyst Doctor Profit called it a “perfectly executed trade” that effectively cleared a huge buildup of excessive leverage, leaving the market in a more balanced state, with the extreme bullish imbalance now gone.
Market intelligence company Glassnode agreed with this view, saying that the deleveraging has changed short-term sentiment and lowered speculative positioning. Futures funding rates and other important metrics have gone back to levels last seen during the 2022 bear market, showing that there has been a reset in trader euphoria.
Furthermore, while the derivatives market contracted, structural capital from sources like spot Bitcoin ETFs has remained, providing a foundation for recovery. The market now appears to be in a consolidation phase, with confidence slowly rebuilding as it searches for its next directional cue, potentially detaching from the initial shock that painted October 10 as an unprecedented disaster.
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