Community member: The October 11th "liquidity vacuum" may have been caused by a chain reaction of high-leverage liquidations

Community member @agintender posted that the "liquidity vacuum" that emerged in the market on October 11th was likely due to a chain reaction triggered by multiple layers of leveraged liquidations, rather than any abnormal platform mechanisms or liquidity withdrawal. His analysis indicates that when a unified account triggers forced liquidation, the system enters a "freeze state," making it impossible to place or cancel orders. Under extreme leverage, the collateral value of both large traders and market makers plummets, leading to simultaneous liquidation pressure on both spot and futures positions. Liquidation bots continued to issue market orders based on the mark price, further exacerbating the price decline. When the primary market maker's account was forced liquidated and all orders were automatically canceled, the order book temporarily lost support, creating a "liquidity vacuum." He added that the contract guarantee fund for the ATOM trading pair alone lost approximately $150 million that day, confirming the chain reaction of liquidations during this extreme market situation.