Bitcoin News Today: Crypto's $125B Plunge Reflects Growing Ties to Traditional Market Turmoil
The global cryptocurrency market lost approximately $125 billion in value within hours on October 10, 2025, following U.S. President Donald Trump's announcement of a "massive" increase in tariffs on Chinese imports and the cancellation of his planned meeting with Chinese President Xi Jinping. BitcoinBTC-- (BTC) fell 1.9% to $118,000, while EthereumETH-- (ETH) slid 4.7% to $4,104, with altcoins experiencing even steeper declines [1]. Over $824 million in leveraged positions were liquidated across exchanges, with Bitcoin accounting for the largest share of liquidations [1]. The sell-off mirrored broader market turbulence, as the S&P 500 erased $1.2 trillion in value within 40 minutes of Trump's remarks [1].
The crypto market's sharp decline reflected heightened sensitivity to geopolitical tensions and macroeconomic uncertainty. Analysts attributed the volatility to renewed fears of a U.S.-China trade war, compounding existing concerns over central bank policies and slowing global growth [1]. Institutional traders, increasingly aligning crypto assets with traditional equities, shifted to a "risk-off" posture as markets across asset classes sold off. The total crypto market capitalization dropped from $4.27 trillion to $4.10 trillion, according to CoinGecko [1].
Further volatility was anticipated in the short term, with analysts warning that the downturn could persist for weeks if trade tensions escalate. Short-term Bitcoin prices were expected to hover between $115,000 and $118,000, while altcoins remained under pressure [1]. A formal executive order or Chinese retaliation could extend the downturn by one to two weeks, potentially triggering further leveraged unwinding and a shift into stablecoins [1]. In the longer term, if trade tensions persist into November, the sell-off could evolve into a broader macroeconomic correction similar to previous tariff-driven shocks in 2019 or 2022 [1].
The impact of Trump's tariff threats extended beyond crypto. U.S. equities plummeted, with the S&P 500 and Nasdaq Composite each down nearly 2% in afternoon trading [2]. Stocks of Chinese-listed firms like Alibaba and Baidu fell over 8%, while U.S. rare earth producers such as USA Rare Earth and MP Materials surged on speculation of reduced Chinese supply [2]. The U.S. government shutdown, now in its 10th day, added to market uncertainty, delaying critical economic data releases and regulatory decisions [2].
In the crypto sector, Ethereum and SolanaSOL-- faced significant declines, with ETH dropping to a two-year low of $1,459.95 and SOL falling 2.7% [3]. Michael Saylor's MicroStrategy reported a $5.91 billion unrealized loss on its Bitcoin holdings, exacerbating bearish sentiment [3]. Technical indicators turned bearish as Bitcoin formed a "death cross," a pattern historically associated with prolonged downturns [3]. Meanwhile, stablecoin inflows and gold demand rose as investors sought safer assets amid heightened uncertainty [3].
The market's response to Trump's tariffs highlighted crypto's growing integration with traditional financial systems. As of October 10, Bitcoin dominance had eased to 56.13%, suggesting capital rotation toward altcoins . However, analysts cautioned that the broader macroeconomic environment-marked by rising trade tensions and liquidity constraints-would likely keep crypto in a risk-averse mode for the near term .
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