ETH Experiences Record $9B Open Interest Drop Amid Major Liquidations

ETH open interest fell from $28 billion to $19 billion in a single day, marking the largest recorded market purge ever.

Binance led liquidations with $3.4 billion wiped out, followed by Gate.io and Bybit as leveraged positions were forcibly closed.

The purge coincided with global events, triggering a cascade of forced liquidations and reducing overall leveraged exposure in the market.

Ethereum (ETH) has experienced its largest open interest purge to date, with a dramatic drop in market positions. Within 24 hours on October 10, ETH’s open interest fell from $28 billion to $19 billion, marking a record single-day decline.

Surge in Liquidations Across Exchanges

The ETH market faced widespread liquidations concentrated mainly on Binance. According to market data, the 30-day moving average of open interest on Binance shows nearly $3.4 billion in positions wiped out this month. Gate.io followed with $1.77 billion, while Bybit recorded $1.6 billion in liquidations.

This sharp decline reflects the high leverage previously present in the market. Traders with excessive positions faced forced closures, resulting in a sudden contraction of open interest. The liquidation wave underlined how quickly leveraged positions can destabilize crypto markets.

Darkfost reported that this session represented a moment of intense market panic. The sharp decrease in ETH open interest demonstrates the scale of the deleveraging event. Traders across exchanges were caught off guard by the speed and magnitude of the drop.

Triggered by External Market Factors

The purge was linked to external market developments, including announcements of new tariffs against China. These announcements affected global markets and acted as a catalyst for the ETH sell-off. The resulting panic initiated a cascade of liquidations across major platforms.

ETH’s open interest now sits approximately 50% below its all-time high of $34 billion, recorded on August 22. The rapid adjustment suggests that the market has undergone a forced reset. Traders have been prompted to reevaluate risk exposure and leverage levels across the crypto ecosystem.

According to Darkfost, the sudden drop created opportunities for altcoins most affected during the deleveraging phase. While Ethereum faced record losses, some market participants may find opportunities in positions cleared during this period.

Market Outlook Following the Purge

ETH’s largest open interest purge emphasizes the market’s volatility when leverage becomes excessive. The recorded rates of liquidations have been unprecedented in the exchange as trader positions continue to be adjusted.

The present state of affairs has resulted in a more conservative attitude among the market players. Investors and traders are monitoring remaining positions, seeking to manage exposure more carefully after the sharp contraction.

The market now exhibits a lower concentration of leveraged positions. This reduction could contribute to a more stable trading environment in the short term, as excessive risk is temporarily removed from the system.

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