This weekend, the cryptocurrency market experienced its most dramatic liquidation event in history.

Bitcoin's price plummeted from its all-time high of over $126,000 to a multi-month low of $105,000 before rebounding to over $110,000.

The price of Ethereum, the second-largest cryptocurrency, also plummeted from its recent high of around $4,700 to below $3,500.

The real disaster occurred in the altcoin market.

ATOM fell from $4 to $0.001;
SUI fell from $3.4 to $0.56;
APT fell from $5 to $0.75;
SEI fell from $0.28 to $0.07;
LINK fell from $22 to $8;
ADA fell from $0.8 to $0.3.

On October 11th, according to data tracker CoinGlass, nearly $20 billion worth of cryptocurrency bets were forced to liquidate within 24 hours, with over 1.6 million traders liquidated, the vast majority of whom were long positions.

Although the $19.37 billion in liquidations is more than ten times the $1.2 billion and $1.6 billion in liquidation losses during the pandemic and the FTX crash, this figure is likely a conservative estimate.

CoinGlass commented on these figures on the social media platform X, stating, "The actual total is likely much higher—Binance reports only one liquidation order per second."

The agency described the incident as:

the largest liquidation event in cryptocurrency history.

Crypto.com CEO Kris Marszalek called for regulators to investigate exchanges with the highest number of liquidations in the past 24 hours.

So, who suffered the most in this storm?

The emerging perpetual swaps exchange Hyperliquid unexpectedly became the epicenter of the liquidation incident. According to CoinGlass data, despite being much smaller than its competitors, it recorded the highest liquidation volume in the market at $10.31 billion. By comparison, Bybit and Binance recorded liquidations of $4.65 billion and $2.41 billion, respectively.

Hyperliquid at the Center of the Storm: Massive Liquidations and Controversial Mechanisms

Zaheer Ebtikar, founder of the crypto fund Split Capital, noted that Hyperliquid "saw the largest number of long liquidations and the least matched liquidity." According to the social media account @LookOnChain, over 1,000 wallets on Hyperliquid were completely emptied during the market crash, with over 6,300 others experiencing losses, resulting in a total loss of over $1.23 billion.

Market participants have pointed the finger at the platform's Auto-Deleveraging (ADL) mechanism.

ADL is designed to protect the exchange by automatically closing profitable or highly leveraged counterparty positions when the insurance fund is insufficient to cover forced liquidation losses.

However, many market participants believe that this mechanism actually exacerbated the sell-off in this incident.

Spencer Hallarn, Global Head of OTC Trading at crypto investment firm GSR, stated: "This mechanism introduces complications, particularly for participants with more complex portfolios." It could cause quantitative market makers' hedge positions to be prematurely liquidated, thereby unbalancing their overall portfolios.

Some rejoice, some worry: Who profited from the crash?

However, the disaster was not all bad news for everyone. According to CoinDesk, data shows that the top 100 traders on Hyperliquid earned a combined $1.69 billion, while the top 100 traders with the largest losses lost $743 million.

This represents a net profit of $951 million, concentrated in the hands of a small number of highly leveraged short sellers.

The biggest winner, a trader with wallet address 0x5273…065f, profited over $700 million from short selling. The biggest loser, an account named "TheWhiteWhale," lost $625,000.

In addition, a community treasury called Hyperliquid Provider (HLP) profited over $30 million from the sell-off by taking over and closing out losing positions.

With market aftershocks still lingering, will Bitcoin fall below $100,000?

While the market has begun to recover some of its losses after the weekend plunge, the full impact of the event may take days or even weeks to fully manifest. “I suspect we’re going to hear about some funds blowing up or market makers getting hammered in the coming days and weeks,” said Edward Chin, CEO of crypto hedge fund Parataxis.