The cryptocurrency market endured its most severe liquidation event ever, with over $19 billion in leveraged positions wiped out across major assets like Bitcoin, Ethereum, XRP, and Solana (SOL).
Triggered by U.S. President Donald Trump’s surprise announcement of 100% tariffs on Chinese imports, the shock rippled through global markets, causing altcoins to plummet 20-90% in minutes and affecting 1.66 million traders—mostly long positions.
The total crypto market cap dipped below $4 trillion, marking a steeper drop than the 2020 COVID crash in terms of liquidation volume.While the price action was brutal—SOL fell 17.5% to around $144 before rebounding to ~$183—the real story was Solana’s underlying network performance.
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Unlike past outages like the 2021 spam-induced halts, this event served as the blockchain’s toughest real-world benchmark yet, and it passed with flying colors. Solana’s core development team, Anza, confirmed the network hit a peak throughput of 100,000 transactions per second (TPS) while maintaining full stability—no downtime, no congestion, and median fees under $0.00011 SOL negligible even at scale.
The Agave validator client processed 6x the usual peak traffic and fully utilized 60 million compute units (CU) per block without degradation. This outpaced Ethereum’s L2s (e.g., Arbitrum faced delays) and even traditional systems like Visa average 65K TPS.
Decentralized exchanges (DEXs) on Solana handled over $7 billion in 24-hour volume. Protocols like Ethena 100% uptime, peg held, Aave record stress-test with zero delays, and Hyperliquid flawless traffic handling shone, while centralized exchanges like Binance halted trading and mispriced assets, exacerbating liquidations.
Solana’s status page reported zero disruptions on October 10-11, contrasting with broader market chaos where some altcoins briefly hit “zero” prices on CEXs due to overwhelmed systems.
What Caused the Crash and Why Solana Thrived
The downturn stemmed from over-leveraged positions up to 100x on some platforms and thin liquidity in altcoins, amplified by automated liquidations creating a feedback loop.
Market makers pulled back, and CEXs like Binance auto-sold collateral, pushing prices into “extreme wick lows” that weren’t reflective of organic demand. Solana’s edge? Its proof-of-history consensus and recent upgrades such as priority fees, local fee markets prevented the spam floods that plagued it in 2021.
This wasn’t just hype—decentralized market makers and DeFi protocols outperformed centralized ones, proving Solana’s design for high-volume, low-cost trading. As one analyst noted, it felt like “a stock exchange where the app never glitches during a market crash.”
Solana emerged as the “true Layer 1 MVP,” alongside resilient tokens like Zcash +9% post-crash and niche chains like Hyperliquid. Losers included Ethereum high fees, congestion, Cosmos ATOM briefly to zero, and CEXs liquidity failures.
Institutional interest is surging—Pantera Capital allocated $1.25B to Solana assets, DeFi TVL hit $12.2B, and Bloomberg pegs a 90% chance of Solana ETF approval by mid-2025. Despite the dip SOL down 15% weekly, this validates its scalability for real-world adoption.
While technically sound, SOL remains volatile—traders eye support at $175, with potential drops to $110 if macro pressures (e.g., U.S. bank M&A, regulatory probes) intensify. Long-term predictions range from $255-$480 by year-end, driven by ETF tailwinds.
This crash wasn’t just destruction; it was a proving ground. Solana didn’t just survive—it accelerated, handling chaos that would cripple most networks. As the dust settles, expect more capital flowing to proven performers like SOL.