Bitcoin Recovers to $115K After Friday's $19B Liquidation Cascade

Bitcoin recovered to around $115,000 by Monday morning after one of the most violent liquidation events in cryptocurrency history wiped out over $19 billion in leveraged positions Friday, erasing the previous week's euphoric climb to record highs.

What began as crypto's strongest week of 2025 ended in catastrophic deleveraging. Bitcoin had set an all-time high of $125,899 on Tuesday, October 7, capping a months-long rally fueled by institutional demand and historic ETF inflows. By Friday afternoon, prices had collapsed below $110,000, with some exchanges briefly registering lows near $101,500.

The crash triggered over 1.6 million forced liquidations totaling $19.31 billion, with long positions bearing the brunt at $16.8 billion in losses, according to CoinGlass data. Bitcoin liquidations reached $5.36 billion, Ethereum saw $4.42 billion, and Solana logged $2 billion in forced closures.

Hyperliquid alone reported platform liquidations exceeding $10 billion, including the largest single order: a $203 million ETHUSDT position. Bybit recorded over $4.5 billion in liquidations while Binance reported $2.5 billion, though actual figures may be higher as the exchange only reports one liquidation per second. Some estimates suggest total liquidations reached $30-40 billion across all platforms.

Trump Comments Spark Panic

The selloff started Friday following US President Donald Trump's renewed threats to impose tariffs on China, which contributed to a broader market rout. The S&P 500 plunged 2.71% to close at 6,552.51, triggering a $2 trillion stock market decline that reverberated through crypto markets.

However, market participants debated whether macro factors fully explained crypto's violence. Some suggested exchange auto-liquidation mechanisms on cross-margined collateral may have amplified the cascade beyond what fundamental selling would have caused. The speed and severity caught even experienced traders off guard.

Last week had started with exceptional momentum. Bitcoin traded near $122,000 on Thursday as crypto ETFs logged their ninth consecutive day of inflows, attracting $198 million for Bitcoin products and $69 million for Ethereum funds. Federal Reserve minutes released midweek reinforced expectations for additional rate cuts, while gold surpassed $4,000 per ounce for the first time.

Friday's collapse unwound that optimism within hours. Once key support levels broke, algorithmic liquidations fed on themselves as cascading margin calls forced additional selling. Funding rates plummeted to levels not seen since the 2022 bear market as the speculative bubble was violently purged.

Over the weekend, markets began stabilizing as the forced selling exhausted itself. Early Monday price action suggests markets are treating Friday as a violent but isolated deleveraging event rather than a fundamental shift in sentiment. Bitcoin's ability to reclaim $115,000 within 48 hours of touching lows near $101,500 demonstrates underlying demand resilience. Ethereum stabilized near $4,100, while Solana traded at $195 as Asian markets opened Monday.

Demand Remains Intact

The recovery suggests underlying demand remained intact despite Friday's violence. The weekend consolidation allowed leveraged positions to unwind without additional panic, while spot buyers stepped in at lower levels. The crypto market shed over $300 billion in total capitalization during the drawdown before regaining composure heading into Monday's traditional market open.

While painful for leveraged traders, the liquidation event may prove structurally healthy for the broader market. The deleveraging flushed excessive speculation from the system and reset funding rates to neutral levels, potentially enabling more sustainable price appreciation.

"Historically, sharp leverage resets during bull markets have preceded extended rallies as spot-driven demand reasserts itself. The return of spot dominance over derivatives typically indicates more durable market structure. Previous crypto bull cycles have featured similar violent corrections that shook out weak hands before continuation moves," BRN analysts said in a note.