Analysis: The October 11, 2025 crash forced market makers to accumulate significant token holdings, resulting in the lowest market liquidity since 2022

The crash on October 11, 2025 caused significant liquidity issues in the crypto market, leading market makers to hold large token quantities. This situation unfolded due to forced liquidations approximating 20 billion USD, weakening their neutral strategies.

With the decline in liquidity, Delta-neutral arbitrage returns have dropped below 4%. Additionally, the DeFi perpetual contracts market faces increasing manipulation risks, contrasting with the traditional financial markets that continue to grow rapidly.