 
 
The crypto market suffered what many analysts are calling the most severe liquidation event in its history, with altcoins plunging to unprecedented lows and billions wiped from open interest within hours.
Crypto investor and commentator Lark Davis described the day’s collapse as “Worse than FTX, worse than 2018,” noting that several altcoins “essentially went to zero,” including Cosmos’ ATOM token.
“This is an extremely rare event and might need some time to recover from,” Davis added, urging investors to “keep your head up” as the market recalibrates.
Market analyst Miles Deutscher attributed the massive selloff to a “perfect storm” of hidden leverage and overextended risk exposure. He explained that although the market didn’t appear euphoric, leverage had quietly built up through traders and even major funds seeking perpetual DEX airdrops.
The trigger, he noted, came from unexpected tariff news that hit while equities were already overbought, leading to an “unraveling of open interest” and the collapse of several overleveraged positions.
 
“It’s one of the most aggressive moves I’ve seen in my six years in the space,” Deutscher said, adding that some funds or market makers “may have been forced to dump significant chunks of their altcoin collateral.”
Despite the carnage, Deutscher emphasized that this was “a big market reset…not the end of the cycle,” advising traders to prioritize risk management and avoid excessive leverage.
Meanwhile, the online community Stockmoney Lizards described the event as “a liquidation cascade,” admitting that recent bullish calls were invalidated as Bitcoin fell, sweeping liquidity near $105,000 before rebounding to around $113,000.
“It shows you once again how important risk management is,” the brand said, maintaining that its macro outlook remains intact unless key technical levels break.
While the full extent of the damage is still unfolding, most experts agree the wipeout is a harsh reminder of crypto’s volatility and the unforgiving consequences of hidden leverage.