Over the weekend, the crypto market experienced what traders are now calling “Crypto Black Friday.” Within just 24 hours on October 10, more than $19 to $20 billion in leveraged positions were liquidated, marking the largest single-day washout in digital asset history.
According to exchange data, Hyperliquid processed over $10 billion in liquidations, while Binance accounted for around $2.4 billion. The brunt of the collapse was borne by altcoins, many of which saw price crashes magnified by thin order books and excessive leverage.
Bitcoin (BTC), by comparison, held relatively firm. Despite a steep sell-off, BTC only fell about 8% from its all-time high of $126,000, settling near $115,058 at press time.
Data compiled by Bitwise portfolio manager Jonathan Man shows that nearly $65 billion in futures open interest (OI) evaporated across exchanges during the crash, effectively wiping the slate clean and resetting speculative positioning to levels last seen in July 2025.
The most severe pressure appeared offshore, with Hyperliquid and Bybit absorbing the majority of the liquidation volume. Binance, typically dominant in such events, accounted for a smaller share than usual, while CME managed to maintain a relatively stable portion of Bitcoin futures open interest, highlighting institutional resilience amid retail-driven chaos.
Funding Rates Flip Negative
The liquidation wave triggered a violent shakeout in derivatives markets. Perpetual swap funding rates across major pairs turned sharply negative or hovered near zero through October 10 and 11, signalling a broad reset of leverage.
Analytics firm Glassnode reported that aggregate funding fell to its lowest level since the 2022 bear market, confirming a “clean deleveraging” across exchanges. Eight-hour funding prints turned neutral-to-negative on Binance, OKX, and Bybit, a rare, market-wide “pay shorts” environment that rewarded bearish traders.
Altcoins saw even more dramatic swings. Solana (SOL), one of the most heavily leveraged assets, experienced funding rates near -0.23% multiple times on October 11, a clear sign of traders aggressively shorting the asset to hedge risk.
This sudden reversal coincided with a collapse in altcoin open interest and basis compression on dated futures, a textbook indicator of a leverage purge occurring primarily outside Bitcoin.
By late weekend, Bitcoin’s monthly futures basis had rebounded to around 8% annualised on Deribit, suggesting that after the flush, the market was already transitioning from overheated to neutral conditions.
ETF Inflows Stall as Derivatives Unwind
While derivatives collapsed, the spot ETF market offered important clues about investor sentiment. Data from Farside Investors revealed that spot Bitcoin ETF inflows, which had been robust earlier in the week, tapered off sharply leading into the crash.
Between October 7 and 8, BlackRock’s iShares Bitcoin Trust (IBIT) drew in nearly $1.3 billion in new funds. However, inflows slowed to $255 million by October 9. By October 10, the day of the crash IBIT’s inflows dropped to just $74 million, while rival issuers like Fidelity (FBTC) and Grayscale (GBTC) recorded net outflows of $13.2 million and $45.5 million respectively.
The result: a net outflow of $4.5 million across all U.S. spot Bitcoin ETFs, the first negative flow in nine trading sessions.
This fading ETF demand, coinciding with the derivatives meltdown, amplified market fragility. The combination of softening spot demand and collapsing futures leverage created the perfect storm for a violent price wick, followed by rapid stabilization once forced sellers were cleared.
Altcoins Suffer Deeper Liquidity Shocks
Altcoins bore the worst of the bloodbath. With thinner order books and fewer structural buyers, several tokens momentarily crashed toward zero on smaller exchanges as cascading liquidations drained liquidity.
Bitcoin benefited from a deeper spot market and ETF-related demand, which acted as a buffer. In contrast, altcoins lacked institutional demand sinks, forcing prices to absorb the full impact of cross-collateral sales and negative funding spirals.
Still, the recovery since the event has been notable. Ethereum, XRP, and Dogecoin are up roughly 10% from their October 10 lows, while BNB rebounded 15.6%, even setting a new all-time high at $1,375 on October 13. Solana recovered 8.3%, and Cardano gained 13%, signalling that dip-buyers stepped in once forced selling abated.
A Cleansing Event, Not a Collapse
Despite the record-breaking magnitude of the selloff, market observers see it as a healthy reset rather than a structural failure. The purge eliminated excessive leverage, neutralized funding imbalances, and re-anchored futures basis to sustainable levels.
By flushing $65 billion in speculative positioning from the system, the market has arguably emerged less fragile than a week ago.
As leverage slowly rebuilds and liquidity providers re-enter, analysts expect altcoins to remain volatile, but the broader market structure now appears more balanced.
In short, “Crypto Black Friday” may be remembered less as a collapse and more as the day crypto markets finally exhaled, clearing the path for a more stable advance.
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