The biggest flash crash in crypto history!

> $19B in Liquidation.

• What happened
• Why it happened
• CT thoughts & reactions
• Did a major entity blow up?
• What's next?

And more ↓ 🧵

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Everything was triggered by just one news.

100% China tariff plus export controls announced by Trump.

✦ Total Liquidation $19B in 12h:
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10x bigger than the FTX Crash.

✦ Why this liquidation event happened:

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Trump canceled his meeting with China and said "massive" tariff increases are coming.
40 minutes later, the S&P 500 erased -$1.2 TRILLION of Market Cap.

But Markets were already looking for a catalyst to pull back on, leverage was through the roof.

✦ Crazy bottoms & price discrepancies:

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✦ Why such price differences:

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✦ Insiders shorted:

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✦ Arguments for Bear Case & for Bull Case:

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• Bear case:
Most altcoin charts are wrecked, only Bitcoin and a few big names are still standing. There could be contagion effects (more collapses to come), since many buyers were crypto-native funds that just got wiped out. The massive altcoin drops and exchange risk failures look terrible to outsiders and may even attract new regulatory scrutiny.

• Bull case:
The crash may have flushed out all leverage and weak hands, creating a cleaner foundation. Big, liquid coins (BTC, ETH, SOL, etc.) held up relatively well, showing maturity and a separation between serious assets and speculative ones. If this was mainly an infrastructure issue (a flash crash, not a fundamental one), it doesn’t mean the bull market is over. Institutional capital isn’t dependent on retail leverage and could keep the cycle alive as long as the macro backdrop stays supportive.

✦ Did a major trading fund or market maker just blew up?

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This kind of market dysfunction wouldn't happen unless a big player with lots of capital and automated systems just got liquidated or is insolvent.

✦ Auto-Delevaraging might have happened to you during this liquidation event:

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ADL is the final backstop of a perpetual futures exchange, used when all other liquidation mechanisms fail.

It’s what happens when one side of the market runs out of money and there’s no one left to take the other side of the trade.

✦ This doesn't feel like a true black swan event:

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The big difference this time is that there doesn’t seem to be a fundamental reason for such an extreme crash. This was a massive technical issue, not a fundamental one.

✦ Time to buy more? & Thoughts on what could happen next:

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Trump could be doing the same playbook as usual.
Many think it's a good time to buy the dips.
Most remain cautious.

I bought some good dips but I also remain cautious and I'm ready to partially exit the markets if things don't get better in Q4.

✦ This was a good stress test for DeFi

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While CEX exploded.

✦ Don't let a leverage blowup dictate your long-term views:

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Own things that you are actually bullish on, and not things you are trying to shift on momentum.

✦ Check on your friends:

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Many things can still happen, we don't know yet the full extent of that event.

Be careful. 🫡