Bitcoin News Today: Bitcoin's Plunge Mirrors 2020 Chaos as $1.3B Longs Teeter

Bitcoin's sharp descent below key price thresholds has triggered unprecedented liquidation volumes on major centralized exchanges (CEXs), with traders bracing for a potential $1.3 billion collapse in long positions if the asset falls beneath $111,000. The volatility, fueled by U.S. President Trump's surprise 100% tariff announcement on Chinese goods, has sent ripples through the crypto market, mirroring the chaos of the 2020 pandemic crash, according to a CoinDesk report.

The price action began to accelerate on Friday as Trump announced export controls on Chinese critical software and additional tariffs effective November 1. Bitcoin, already trading weak at $117,000 following the news, plummeted past $110,000 within hours, marking a 12% drop in 24 hours. Ether (ETH) and altcoins like Solana (SOL) and XRP followed suit, with some tokens collapsing over 40%. CoinGlass data revealed that the market meltdown erased over $7 billion in long positions, as traders who bet on higher prices faced forced liquidations, the CoinDesk report noted.

The liquidation risk intensifies at specific price levels. If Bitcoin dips below $111,000, cumulative long liquidations on CEXs could surge to $1.3 billion, according to a TokenTopNews report citing Coinglass data. Conversely, a rebound above $114,000 could see short liquidations reach $908 million, according to a BlockBeats flash. The liquidation charts, however, reflect intensity rather than exact contract values, indicating how liquidity cascades could amplify price swings when these thresholds are breached, as discussed in a Coinotag report.

Market analysts have likened the current turmoil to the 2020 market crash. Prominent trader Bob Loukas called the move "Covid level nukes," while Ram Ahluwalia of Lumida Wealth noted the combination of "overbought conditions" and geopolitical tensions as the catalyst. Zaheer Ebtikar of Split Capital described the altcoin complex as "eviscerated," with levels unseen in over a year, as the CoinDesk report highlighted.

The implications extend beyond Bitcoin. Ethereum, Solana, and other altcoins face systemic risks as collateralized protocols adjust to the liquidity crunch. Coinglass analysts warn that high leverage in both long and short positions could exacerbate volatility, with potential regulatory scrutiny looming if systemic risks rise, the TokenTopNews report added.

As the market grapples with these dynamics, traders are closely monitoring the $110,000 level—a psychological floor that, if breached, could trigger a cascade of forced sales. With leverage ratios stretched and risk appetite waning, the crypto market's resilience will be tested in the coming days.