Bitcoin News Today: Leverage Amplifies Trade War Impact in $19B Crypto Crash

The cryptocurrency market experienced its largest liquidation event in history on October 10–11, 2025, as U.S. President Donald Trump announced a 100% tariff on all Chinese imports, triggering a $19.13 billion wipeout in leveraged positions, according to data from CoinGlass CNN^[1]. The move, described as a retaliatory response to China's export restrictions on rare earth minerals, sent shockwaves through global markets, with Bitcoin, Ethereum, and Solana among the hardest-hit assets.

Bitcoin plummeted over 12% in a single day, briefly dipping below $102,000 before stabilizing near $113,000. Ethereum fell nearly 16%, while Solana dropped over 20%, with total liquidations reaching $5.38 billion for Bitcoin and $4.43 billion for Ethereum Livemint^[5]. The global crypto market cap shrank from $4.3 trillion to $3.8 trillion within 24 hours, erasing $500 billion in value CCN^[3]. Over 1.6 million traders were liquidated, with more than $7 billion in positions wiped out within one hour of the tariff announcement Coinpedia^[2].

The sell-off was exacerbated by leveraged trading strategies, particularly in perpetual futures contracts, which amplified losses as automated liquidation mechanisms triggered cascading margin calls. Hyperliquid, a decentralized exchange, reported the largest single liquidation of $203 million in Ethereum CCN^[3]. Analysts described the event as a "black swan" triggered by geopolitical tensions and excessive leverage, with Vincent Liu of Kronos Research noting that "the sell-off was sparked by U.S.-China tariff fears but fueled by institutional over-leverage" Coinpedia^[2].

The U.S. stock market also suffered, with the Nasdaq and S&P 500 posting their steepest declines in six months CNN^[1]. Brian Strugats of Multicoin Capital warned of potential contagion risks, as leveraged positions in crypto and traditional markets became increasingly intertwined . Despite the turmoil, some analysts viewed the crash as a healthy correction. David Jeong of Tread.fi emphasized that while the event exposed vulnerabilities in leveraged positions, Bitcoin's ability to hold key support levels suggested the bull market remained intact CCN^[3].

The liquidation event highlighted the crypto market's sensitivity to macroeconomic and geopolitical shocks. Caroline Mauron of Orbit Markets noted that if Bitcoin fell below $100,000, it could signal the end of a three-year bull cycle . However, others, like Arthur Hayes of BitMEX, saw opportunities in the volatility, suggesting the crash created "rare buying opportunities" for high-quality assets Coinpedia^[2].

The market's reaction to Trump's tariffs underscored the interconnectedness of global trade policies and digital asset prices. As tensions between the U.S. and China escalated, investors retreated to safer assets, with stablecoins briefly seeing premiums as liquidity evaporated. The event also reignited debates about regulatory frameworks for leveraged crypto trading, with some analysts calling for standardized margin requirements akin to those in traditional equity markets .