Will Oct. 10 Repeat? Crypto Data Shows Key Differences

Crypto markets declined on Wednesday, with bitcoin's price decreasing by 1.7% to approximately $84,100 and ether falling 3.5%. Because leveraged traders had returned to the market, the downturn resulted in the liquidation of $403.58 million in long positions over a single hour.

The selloff reignited concerns about a recurrence of the Oct. 10 event. Still, indicators suggest that while leverage has increased, the conditions that drove that crash are not present.

What Looks the Same?

This analysis centers on derivatives, as the Oct. 10 crash was fueled by leverage. Leading up to that date, the rally supported by debt rather than new capital, and around $17 billion worth of long positions were wiped out.

A similar accumulation is occurring. According to CoinGlass, open interest (OI) — the total value of outstanding futures contracts — increased by 4.0% this week to 650,480 BTC. Before the Oct. 10 crash, OI rose 4.1% over five days.

Relative to market capitalization, there has been minimal change. Bitcoin's OI now represents 3.2% of its market cap, compared to 3.7% before the crash. For Ethereum, it is 10.4%, not far from 11.3%.

The dollar figures obscure this trend. Between Oct. 10, 2025, and the period just before Wednesday's selloff, BTC OI dropped 38.6% in dollar terms but only 12.7% in terms of coin count. That divergence is largely due to bitcoin's reduced price.

Put differently, the market's leverage relative to its size is roughly equal to what it was before Oct. 10.

• The Accumulation: Bitcoin open interest climbed 4.0% over the past week.
• Similarity: Ethereum's leverage has returned to levels close to those seen before the crash.
• The Risk: Higher leverage means minor declines can trigger liquidations.

What Is Different with the Crypto Market?

The price of that leverage is significantly reduced. Funding rates indicate the prevalence of long positions; these are small fees that bull traders pay to maintain their positions.

Prior to Oct. 10, funding rates for BTC and ETH on Binance and Bybit exceeded 8% on an annualized basis on 18 out of 32 exchange-day observations. During the current week, the rate surpassed 8% on just one of 28 observations and turned negative on three occasions. Deribit data reflects a similar change: daily BTC funding was 26.9% before Oct. 10, compared to 7.1% this week.

In the meantime, a major source of fuel has been depleted. According to CoinGecko, Ethena's USDe — a stablecoin backed by hedged derivative positions — contracted by 66% to $4.99 billion. This aligns with a wider reduction in leverage since October.

Consequently, positions are expanding without traders paying high costs to maintain them. That means there are fewer overextended long positions that could collapse simultaneously.

• Cooling Off: Funding rates exceeded 8% on only 1 out of 28 exchange-day observations.
• Depletion: USDe supply has declined 66% since Oct. 10.
• Key Takeaway: Traders are not paying premium to pursue price gains.

Why the Crypto Market Flush Stayed Small

That distinction was evident in Wednesday's liquidation event. Over the 24 hours ending early Wednesday, $487.02 million in long positions were liquidated as bitcoin dropped 1.96%. This translates to roughly $248 million in forced selling for each percentage point decline.

On Oct. 10, the comparable metric was approximately $2.2 billion per 1% decline, around nine times greater. In contrast, typical selloffs in 2025 saw forced selling ranging from $157 million to $504 million per percentage point.

Since the forced selling was contained, the decline appears to be a correction rather than a chain reaction. Bitcoin is currently trading around $84,100, with support at $82,300 and resistance at $86,000.

However, if the price drops below $82,300 and funding rates rise above 8%, a scenario similar to Oct. 10 could emerge. A move back above $86,000 would validate the correction.

• The Metric: $248 million in liquidations per 1% decline.
• The Bottom: Support level at $82,300, near the Sept. 28 low.
• Warning Sign: Funding above 8% while open interest continues to increase.

Analyst’s View: The upcoming Federal Reserve meeting on Oct. 27-28 represents the most obvious catalyst. A further rate increase following September's hike could drive bond yields higher and bring bitcoin down to $82,300. If funding rates remain below 8% through that event, a crash similar to Oct. 10 appears improbable.