1011 Crypto Market Crash Analysis

Big dump triggers a chain reaction.

In the early hours of October 11, news related to Trump triggered panic selling, leading to a short-term big dump of mainstream cryptocurrencies by double digits, while altcoins plummeted by 80-95%. The entire network saw liquidations totaling $19.3 billion in just 24 hours, setting a new daily record. Assets such as USDe, WBETH, and BNSOL decoupled, and a chain of liquidations drained liquidity, resulting in a free-fall collapse.

ADL mechanism controversy focus

Wintermute CEO Gaevoy criticized the automatic liquidation (ADL) by exchanges that triggered chaos during extreme market conditions, where short positions were liquidated at market prices of only $1 despite a strong position of $5, stating that the lack of transparency in pricing algorithms undermines market trust. He called for a clear disclosure of execution priorities to avoid irrational liquidations exacerbating panic.

Market Maker Liquidity Dilemma

During the big dump, the platform was congested, causing delays in withdrawals, and market makers’ assets were stuck across exchanges, unable to place or transfer orders, forced to stop rather than voluntarily exit. Gaevoy emphasized that the lack of a Circuit Breaker left investors with no breathing space and suggested looking to traditional finance for a pause in trading or auction models.

Mainstream asset inflow trend

In the future market, funds are concentrated on mainstream coins such as BTC, ETH, and SOL, and the decrease in volatility indicates market maturity, while the liquidity of meme coins is declining. This round of corrections strengthens the safety of long-term holding, and the upgrade of transparent risk control has become a key factor in the maturity of the encryption ecosystem.

Summary

The big dump on 1011 not only revealed the systemic weakness of the crypto market but also reminded people once again: under extreme market conditions, the infrastructure of exchanges, the ADL mechanism, and liquidity allocation will directly determine whether the market can operate stably.