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. The post October 10 Crash Exaggerated? Real Crypto Losses Just $2.31B (Analyst) appeared first on CryptoPotato .
