When October Surprise Meets Crypto Liquidity Drought

CEX

Derivatives

Liquidity

13/10/2025

A sharp, geopolitics-triggered shock on Friday cascaded into one of crypto’s largest deleveraging events, with more than $500bn wiped from market cap as forced liquidations surged, order book depth vanished, and venue-specific pricing frictions amplified stress, especially around Binance and USDe, leaving open interest suppressed despite a partial weekend rebound.

BTC longs wiped out as market plunges
Liquidity dried up as market makers stepped back
The role of Binance and Ethena’s USDe in the crash

Trend of the Week

Volumes spiked on Friday as panic swept through crypto markets, exposing a stark liquidity gap across BTC order books. As selling accelerated, there simply wasn’t enough resting depth to absorb the flow; order books on several exchanges thinned out to the point of appearing empty for several minutes across major BTC venues. This dislocation, driven by a retreat of active market makers, amplified price impact and volatility and set the tone for the session’s outsized move.

On several exchanges, there was almost nothing near the mid; only wider bands such as 4% and 10% from the mid-price showed meaningful bids, most visibly on Binance, Crypto.com, and Kraken.

It is highly likely that the volatility and uncertainty made market makers less comfortable taking trades during Friday’s crash, which was likely a contributing factor to the severity of the sell-off. Sign up below to read more!

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When October Surprise Meets Crypto Liquidity Drought
A sharp, geopolitics-triggered shock on Friday cascaded into one of crypto’s largest deleveraging events, with more than $500bn wiped from market cap as forced liquidations surged, order book depth vanished, and venue-specific pricing frictions amplified stress, especially around Binance and USDe, leaving open interest suppressed despite a partial weekend rebound.

Written by Adam Morgan McCarthy
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