The crypto market experienced a sharp correction in late September 2025, leaving many retail traders reeling. However, a new report suggests that savvy market participants were already bracing for impact, significantly reducing their risk exposure in the days leading up to the $1.5 billion “Red Monday” liquidation event. But what does this mean for the future of crypto trading and risk management in an increasingly volatile market?

Decoding the “Red Monday” Crypto Crash

Retail Traders Anticipated the Downturn

Leverage.Trading, a risk-first crypto education and research platform, released its September 2025 Crypto Futures & Leverage Risk Report, offering a detailed look into the behaviour of retail traders ahead of the significant market downturn on September 22nd. The report, based on an analysis of 106,302 anonymised trade setups across various global crypto leverage trading platforms and futures exchanges, reveals a crucial insight: many traders were actively reducing their risk exposure well before the mainstream media picked up on the impending crash.

The data indicates a notable increase in the use of Leverage.Trading’s risk-management tools in the days leading up to “Red Monday”. Liquidation checks and leverage calculations between September 16th and 20th saw a spike of almost 30% above the early-month average. This suggests that traders were not caught completely off guard but instead anticipated the downturn and strategically trimmed their positions.

US Traders Lead the Charge in Risk Mitigation

Interestingly, the report highlights a particularly proactive approach by US-based traders. Margin verifications in the US jumped by 40%, demonstrating a heightened awareness of risk among American market participants. Furthermore, US traders ran almost twice as many liquidation checks per user as the global average, underscoring a decisive shift towards defensive trading. This aligns with the events of September 22nd, where the market experienced a rapid and significant downturn, leaving many exposed.

Funding Rates Tell a Story of Shifting Sentiment

The analysis also reveals changes in funding rates as a key indicator of shifting market sentiment. Between September 22nd and 24th, funding rate re-checks surged by 35% compared to the previous week. Perpetual funding rates turned negative, with Ethereum funding rates dropping to -0.0021. This meant that traders were actually paying to hold short positions instead of long ones, a clear signal that the market had transitioned from bullish to bearish sentiment. This pattern was observed across major perpetual futures platforms, suggesting that traders were cross-referencing data from various sources, including profit calculators and live market dashboards, to meticulously verify their numbers and safeguard themselves against the escalating market risks.

The Importance of Behavioural Analytics in Crypto

Leverage.Trading’s report underscores the growing significance of behavioural analytics in the crypto space. While this field has been a mainstay in traditional finance for years, it is still in its nascent stages within the crypto market. The report’s findings demonstrate how behavioural data can reveal shifts in trader sentiment and risk appetite before they become apparent on conventional price charts.

Anton Palovaara, founder of Leverage.Trading, explains the motivation behind the platform: “Early in my career, I made the same mistakes many retail traders do: ignoring liquidation thresholds, underestimating margin requirements, and overlooking fees. It wasn’t until I learned to measure and manage those risks that I started trading successfully. That experience shaped the entire mission of Leverage.Trading — to put risk first and make the mechanics of leverage clear and measurable so traders can stay in control.” Palovaara’s personal experience highlights the crucial need for better risk management tools and education within the crypto derivatives market.

Leverage.Trading: A Risk-First Approach

Founded in 2022 and based in Córdoba, Spain, Leverage.Trading aims to fill the gap in risk management resources for crypto traders. The platform provides advanced calculators, educational explainers, plain-English strategy guides, behavioural data reports, and transparent comparisons of crypto leverage platforms. Their calculators cover key trading mechanics, helping traders quantify exposure and manage risk before execution. The platform also offers research and explainers on crypto futures trading, perpetual futures, and the regulatory aspects of crypto leverage trading.

Looking Ahead: Risk Management in a Maturing Market

The events of “Red Monday” and the insights from Leverage.Trading’s report serve as a stark reminder of the inherent risks associated with leveraged crypto trading. As the market matures and becomes increasingly complex, access to robust risk management tools and comprehensive educational resources will be critical for traders to navigate the volatility and protect their capital. The increasing use of mobile devices for risk monitoring, as highlighted in the report (58% of all activity), further indicates a growing need for readily accessible and user-friendly risk management solutions.

For 2025, this data underscores the rising importance of data aggregators to identify opportunities and manage risk effectively. Furthermore, a clear trend has emerged: a more refined set of crypto investors is increasingly reliant on data and analytics when investing in crypto assets.

Methodology:

The September dataset analysed 106,302 anonymized trade setups submitted via Leverage.Trading’s suite of calculators and risk tools. Data was aggregated across futures, margin, leverage, funding rate, and liquidation simulations between September 1–30, 2025. All records were anonymized and processed using proprietary behavioral analytics models to identify shifts in leverage ratios, margin utilization, funding costs, and risk-check frequency. Only aggregated, non-identifiable data was included in the analysis.