Did Crypto Traders Lower Risk Before the 10/10 Date?

Understanding the 10/10 Crypto Market Memory

October 10 carries a heavy history for crypto traders. On October 10, 2025, a tariff threat from President Donald Trump set off a massive market downturn.

That single event forced more than $19 billion in trading bets to close automatically. It stood as a record for forced closures in the crypto market.

Fast forward to this week. Many market observers claimed traders learned their lesson and cut back on borrowed money to avoid another shock. Let us look at what the numbers actually reveal.

What Is Leverage and How Does It Cause Liquidations?

To understand the market moves, it helps to review how leverage works. Trading with leverage means using borrowed money to increase the size of a position.

Think of it like buying a home with a small down payment. If property values go up, your gains multiply. But if prices drop even slightly, you risk losing your initial deposit.

In crypto, when market prices move against a leveraged bet, exchanges step in to close the trade automatically. This process is known as a liquidation.

The Reality: Traders Took On More Borrowed Bets

Despite rumors that traders played it safe, market data shows leverage actually increased right before BitcoinBTC+0.24% experienced a price slip.

Bitcoin recently slid to $80,393. Over the course of 24 hours, over $1 billion in total trading positions were wiped out by forced liquidations.

Traders betting on price increases took the biggest hit. About $930 million of those forced closures came from bullish 'long' bets.

While leverage can expand market opportunities, short-term price swings can lead to quick liquidations, making risk management crucial for traders.

Debunking the Myth of Pre-Anniversary Risk Reduction

Earlier in the week, some commentators argued that market anxiety made traders reduce their borrowing ahead of the anniversary.

The bear market PTSD is so strong that people actually deleveraged for an anniversary to a liquidation event. Think how deep that PTSD goes if you’re doing that. I’m telling you, there is mass under exposure and things actually look good,

That view came from Eric Conner, a crypto veteran and co-author of EthereumETH-0.45%'s EIP-1559 upgrade.

However, data metrics show a different story. Analytics firm CryptoQuant tracks an Estimated Leverage Ratio, which measures open derivative bets against the Bitcoin held on exchanges.

A higher ratio means more borrowing relative to available reserves. On October 3, this ratio was roughly 0.234. By October 8, it climbed to about 0.256.

The ratio later eased to around 0.250, but it remained higher than at the start of the week. This indicates traders did not lower their leverage beforehand.

Open Interest Drops as Positions Get Wiped Out

While leverage ratios remained high, total active bets in the market did drop following the liquidations.

Data from CoinGlass shows that total Open Interest—the combined value of all open derivative trades—fell from about $154 billion down to roughly $142 billion.

This decline suggests that liquidations cleared out positions by force, rather than traders voluntarily closing trades to manage risk.

Funding Rates Compare Favorably to Last Year

Even though leverage was elevated, funding rates showed that market conditions were far less extreme than during the 2025 crash.

Funding rates are regular payments exchanged between long and short traders. When bullish traders dominate, they pay a fee to stay in their trades.

On Deribit, the annualized Bitcoin funding rate hovered near 7.1% this week. That is noticeably lower than the 26.9% rate seen before the 2025 crash.

Exchange data from OKX also showed that funding rates averaged around 3.5% over the past seven days.

Market Sentiment and Potential Future Liquidation Levels

Overall trader sentiment remained relatively resilient throughout the price decline.

The Crypto Fear and Greed Index from Alternative.me measures sentiment on a scale from 0 to 100. It registered a score of 64 ('Greed') on Saturday and slipped only to 59 during the Friday selloff.

Bitcoin trades at $82,699, up 0.14% over a 24-hour period. This price sits approximately 35% below its October 2025 record high of nearly $126,000.

Past performance of digital assets is not a guarantee of future returns. You can track real-time asset updates at bitkub.com/th/market/BTC.

Looking forward, data from Glassnode identifies the next significant cluster of leveraged bets around the $75,000 level.

If market conditions shift and Bitcoin slides toward that threshold, further liquidations could follow depending on trader position sizes and market liquidity.