The crypto market’s massive $19 billion liquidation last Friday continues to spark debate among traders — with opinions split between claims of manipulation and those who view it as a normal correction phase.
During the sudden sell-off, open interest across perpetual futures on decentralized exchanges (DEXs) plunged from around $26 billion to under $14 billion, according to DefiLlama data. Meanwhile, lending protocols saw daily fees soar past $20 million, the highest on record, while weekly trading volume on DEXs surpassed $177 billion. Borrowing activity across lending platforms also dropped below $60 billion, hitting its lowest point since August.
Analysts Call It a Natural Deleveraging Phase
Despite widespread frustration and theories of an orchestrated move by large market players, on-chain data suggests the event may have been a healthy market adjustment rather than an artificial crash.
CryptoQuant analyst Axel Adler Jr reported that around 93% of the open interest drop — about $14 billion in total — came from what he described as a “controlled deleveraging” rather than a full-scale liquidation cascade.
Only about $1 billion worth of long Bitcoin (BTC) positions were liquidated, a sign that the market handled the correction with relative maturity, Adler added in an X post earlier this week.
Liquidity Pullbacks Raise Questions
Still, not everyone agrees that the sell-off was entirely organic. Some analysts claim that major market makers worsened the downturn by suddenly withdrawing liquidity at key moments.
Blockchain investigator YQ pointed out that market makers started removing liquidity around 9:00 PM UTC on Friday — roughly an hour after U.S. President Donald Trump issued a new tariff warning. Within just 20 minutes, many tokens had bottomed out, and the overall market depth collapsed by 98% to roughly $27,000, YQ noted.
Further analysis from Coinwatch confirmed the same 98% liquidity drop on Binance, the largest global exchange. According to their Sunday post, two main market makers temporarily “pulled everything from the books.” About an hour and a half later, one returned to normal operations, while another remained mostly inactive.
Coinwatch also highlighted that for another Binance-listed token valued at over $5 billion, two out of three market makers “went offline” for nearly five hours — and that discussions are underway to ensure faster liquidity recovery in future market events.
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