On Oct. 10, 2025, the crypto market saw an unprecedented crash. It wiped out around $19 billion in liquidations within 24 hours. As analysts started to figure out what happened, the term “automated de-leveraging” began to circulate. Many traders learned what it means the hard way.
Summary
- Automated de-leveraging (ADL) is a practice where the exchange is closing profitable short positions as it runs out of money to pay traders.
- On Friday, the crypto market went through one of the biggest downfalls following Donald Trump’s announcement of 100% tariffs on goods from China.
- Traders complain that their profitable short positions were closed by exchanges. Exchanges went offline, blocking users from buying the dip.
- Binance promised to compensate the traders whose losses were not caused by market volatility. The announcement drew criticism as many believe the exchange deliberately blocked users from profiting.
Black Friday
On Oct. 10, Donald Trump announced the U.S. will impose 100% tariffs on goods from China, starting on Nov. 1, 2025. Trump reversed his stance on China on Sunday, claiming “China will be fine,” without going into further detail on what he means. On Oct. 14, the White House confirmed that Trump and Chinese President Xi Jinping plan to meet for trade negotiations.
However, on Friday, when people didn’t know about the future change of Trump’s stance, the crypto market went through one of the biggest shakeouts in history. Bitcoin and Ether dropped by 17% and 20% respectively, while XRP lost 60% of its value. Solana saw a 38% drop. Some of the smaller coins neared zero. Reportedly, the Oct. 10 downfall erased $670 billion of the crypto market value. Another outcome for the crypto market was the wave of liquidations of leveraged positions that amounted to $19 billion.
Author: Alexey Borovets
