Bitcoin News Today: Leverage and Geopolitics Trigger Crypto's Worst Liquidation Wave

The U.S. financial markets experienced significant turbulence on October 10, 2025, following President Donald Trump's announcement of 100% tariffs on critical software imports from China and new export controls. The move, framed as retaliation against Beijing's rare-earth mineral export restrictions, triggered a sharp sell-off across global equities and cryptocurrencies. The S&P 500 fell over 2%-its worst single-day drop since April 2025-while Bitcoin plummeted 8.4% to $104,782, erasing gains from its recent all-time high of $124,000 Forbes^[1]. Over $19 billion in leveraged crypto positions were liquidated within 24 hours, according to data tracker CoinGlass, marking the largest liquidation event in the industry's history CNN^[2].

The rapid collapse was exacerbated by the leverage embedded in crypto derivatives markets. CoinDesk reported that more than 16 billion dollars in long positions were wiped out, with over 1.6 million traders affected. On Hyperliquid, a decentralized exchange, 6,300 wallets were pushed underwater, and $1.2 billion in capital was lost. Ethereum and Solana fell 14.2% and 20%, respectively, within a single trading day CoinGlass^[3]. The liquidation event underscored the vulnerability of leveraged positions during macroeconomic shocks, with analysts noting that forced selling cascaded across exchanges as stop-loss orders and margin calls triggered further declines Coingabbar^[4].

Speculation emerged about potential profiteers exploiting the chaos. One anonymous trader reportedly earned $88 million in 30 minutes by shorting Bitcoin before the tariff announcement, though no evidence confirmed insider knowledge The Motley Fool^[5]. Similarly, a whale on Hyperliquid shorted $1.1 billion worth of BTC and ETH, netting an estimated $200 million in profits. While these cases highlighted the market's sensitivity to geopolitical events, they also raised questions about the role of algorithmic trading and liquidity constraints in amplifying volatility CCN^[6].

Analysts attributed the crash to a combination of policy uncertainty and structural weaknesses in crypto markets. Brian Strugats of Multicoin Capital noted that the event exposed counterparty risks and could trigger broader contagion, with some estimates of total liquidations exceeding $30 billion CNBC^[7]. Vincent Liu of Kronos Research emphasized that while U.S.-China trade fears initiated the sell-off, institutional over-leverage intensified the fallout. The collapse of leveraged perpetual futures contracts, designed for around-the-clock trading, further accelerated the downturn Coinpedia^[8].

The event sparked debate over whether the crash signaled the end of the bull cycle or a necessary correction. Caroline Mauron of Orbit Markets identified $100,000 as a critical support level for Bitcoin, below which the three-year bull market could collapse. However, others argued that the liquidation purged excessive leverage, potentially setting the stage for a recovery. Arthur Hayes of BitMEX described the event as a "black swan" but hinted at buying opportunities for long-term investors The Street^[9].

Global trade tensions remain a key wildcard. Trump's tariffs reignited fears of a U.S.-China trade war, with Beijing retaliating by imposing 125% duties on U.S. goods. The U.S. Treasury's 90-day tariff pause provided temporary relief, allowing Bitcoin to stabilize above $113,000 by October 11. However, further escalations or regulatory shifts could prolong the downturn Coinedition^[10].