You can read what happened here, but let me reiterate.
Yesterday at 12:30pm PT, someone dumped several million dollars worth of Ether (ETH) on the GDAX ETH-USD order book. According to GDAX, this sale of ETH resulted in orders being filled from $317.81 to $224.48, translating into a book slippage of 29.4%. The result of this slippage was about 800 stop loss orders(remember, we just talked about these) and margin funding liquidations.
WTF is a Margin Liquidation? - "Liquidation margin applies to investors or traders who use margin (leverage) to increase the potential profit of a trade. When the equity of a margin account falls below the liquidation margin level requirement, the broker may automatically close any open positions in the account."
How does that actually work?
person A has 10 dollars. B has 2 dollars.
A to B: Can I borrow 10 Dollars, I'll pay back 11 next week.
A: Sure.
B predicts bull pennant, buys 100 chocolate bars for 10 dollars.
A observes that the price of chocolate bars is falling. Now person B's bars are worth only 9 dollars.
A to B: Are you crazy? I want my dollars back. NOW!
Thus person B is forced to sell chocolate bars and pay 11 dollars to A. A little sister did similar deals with other people. They all are forced to sell, driving the price down. Now people are getting nervous. (Credit to this guyfor the ELI5)
Moral of the story the price of ETH temporarily dropped as low as $0.10.
source coinesheet