Last week\u2019s 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.<\/p>\n
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\u2019s place in market history.<\/p>\n
According to CryptoQuant, the widely reported<\/a> $19 billion figure is the nominal value of leveraged positions that were closed, not the actual money traders lost.<\/p>\n Analyst Carmelo Alem\u00e1n explained<\/a> that liquidation happens when an exchange forcibly closes a leveraged position because the trader\u2019s 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.<\/p>\n \u201cLeverage magnifies both gains and losses: when the price moves favorably, profits multiply; when it moves unfavorably, the liquidation risk increases exponentially,\u201d stated Alem\u00e1n.<\/p>\n 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.<\/p>\n 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.<\/p>\n \u201cThe reported $19B corresponds to the nominal value of leveraged positions, not actual trader losses,\u201d wrote Alem\u00e1n. \u201cOn-Chain data shows a strong correction\u2014but far from the historic Covid-era event.\u201d<\/p>\n 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.<\/p>\n Despite the painful unwind of positions, some observers have interpreted last week\u2019s occurrence as a necessary market correction. Pseudonymous analyst Doctor Profit called it<\/a> a \u201cperfectly executed trade\u201d that effectively cleared a huge buildup of excessive leverage, leaving the market in a more balanced state, with the extreme bullish imbalance now gone.<\/p>\n Market intelligence company Glassnode agreed with this view, saying that the deleveraging has changed<\/a> 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.<\/p>\n 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.<\/p>\n The post October 10 Crash Exaggerated? Real Crypto Losses Just $2.31B (Analyst)<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Last week\u2019s 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\u2019s […]<\/p>\n","protected":false},"author":0,"featured_media":105240,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-105239","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/105239"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=105239"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/105239\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/105240"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=105239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=105239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=105239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}A Market Reset and Path Forward<\/h2>\n