Bitcoin News Today: Trade War Fears Drive Crypto Sell-Off, Institutions Double Down on Bitcoin

Bitcoin and Ethereum experienced significant declines on October 10, 2025, as renewed U.S.-China trade tensions triggered over $700 million in crypto liquidations within 24 hours. The sell-off followed a public statement by U.S. leadership warning of potential escalations, including increased tariffs and export controls on Chinese goods. Markets reacted swiftly, with Bitcoin falling approximately 3% to $119,000 and Ethereum dropping 5.8% to $4,100, according to data from Coinglass and TradingView Coinotag^[1]. Long positions accounted for roughly $609 million of the total liquidations, underscoring the vulnerability of leveraged positions during periods of heightened volatility Coinotag^[1].

The immediate catalyst was the announcement of potential export controls on strategic materials, including rare earths critical to semiconductor production. China's Ministry of Commerce had previously imposed case-by-case approvals for advanced chip-related exports, compounding concerns about supply chain disruptions . Analysts noted that such trade policies historically drive risk-off behavior, as investors shift capital to safer assets and deleverage positions Coinotag^[1]. The rapid sell-off exposed concentrated leverage across exchanges, with funding rates tightening and cascading margin calls amplifying downward pressure Coinotag^[1].

Technical indicators reflected weakening momentum. Bitcoin's RSI hovered near 52, failing to reclaim resistance at $123,000, while Ethereum's RSI fell to 41 amid rising selling pressure Coinotag^[1]. The broader financial markets mirrored the crypto downturn, with the Nasdaq declining 1.77% and the S&P 500 down 1.25% Decrypt^[2]. Institutional investors, however, showed resilience, with addresses holding 1,000–10,000 BTC (excluding exchanges and miners) increasing their holdings, suggesting confidence in Bitcoin's long-term trajectory Blockonomi^[3].

The liquidation data highlighted the disproportionate impact on altcoins. Solana (SOL) and Dogecoin (DOGE) saw declines exceeding 5% and 8%, respectively, with Coinglass reporting $459 million in liquidations within a single hour Decrypt^[2]. On-chain analysis revealed that retail participation remained subdued, with Unspent Transaction Outputs (UTXOs) held by short-term investors at 20%, below historical thresholds for market tops Blockonomi^[3].

Market observers emphasized the interplay between geopolitical developments and crypto dynamics. U.S. Treasury Secretary Scott Bessent noted that trade talks with China had "stalled," while a U.S. Appeals Court reinstated Donald Trump's "reciprocal tariffs," reintroducing uncertainty Blockonomi^[3]. Analysts warned that further escalations, such as formalized tariffs or retaliatory measures, could exacerbate downside risks. Conversely, a temporary pause in tariffs or successful negotiations might stabilize markets, though sustained gains would depend on concrete policy clarity Yahoo Finance^[4].

The rare earth export controls, meanwhile, raised alarms about semiconductor supply chains. China's dominance in rare earth production-accounting for 70% of global mining and 90% of processing-means restrictions on materials for advanced chips could delay production by one to two quarters, particularly affecting foundries in China Taiwan, Japan, and South Korea . This added a layer of complexity to the trade tensions, as global tech firms recalibrate supply chains amid heightened regulatory scrutiny.

Traders were advised to adopt risk-mitigation strategies, including reduced leverage, staggered stop-losses, and inverse derivatives to hedge against further shocks. Institutional investors, however, maintained a cautious bullish stance, with some suggesting that Bitcoin's resilience during prior trade disputes and its growing institutional adoption could underpin a recovery .