Bitcoin News Today: Trade War Fears Spark $200B Crypto Crash as Bitcoin Dives 10%

Bitcoin prices plummeted over 10% following U.S. President Donald Trump's announcement of a 100% additional tariff on Chinese imports, escalating trade tensions and triggering a broader risk-off market sentiment. On October 10, 2025, Bitcoin (BTC) dropped below $108,000, erasing nearly $200 billion in total cryptocurrency market value within hours. Ether (ETH), XRP, and Solana (SOL) fell between 15% and 30%, while altcoins like ADA, LINK, and Aave (AAVE) declined as much as 40% Coindesk^[1]. The crash coincided with $6.5 billion in liquidations of leveraged crypto positions, according to on-chain data BeInCrypto^[2].

The tariff announcement, effective November 1, followed Trump's earlier threats to counter China's export controls on rare earth metals. "Also on November 1, we will impose export controls on any and all critical software," Trump wrote on Truth Social, signaling a full-scale trade confrontation. The move intensified fears of global supply chain disruptions, particularly in semiconductors and AI sectors, which underpin blockchain infrastructure Bitcoin Magazine^[3]. Traditional markets also reeled, with the S&P 500 and Nasdaq dropping 2% and 2.7%, respectively, as investors shifted to safe-haven assets like gold CNN^[4].

Bitcoin's decline tested key psychological support levels, including the $110,000 threshold, which analysts noted as a critical defense before the 200-day simple moving average (~$106,600). The daily candlestick pattern-a massive red engulfing bar-highlighted panic selling and liquidity crunches, with funding rates flipping negative to accelerate downward momentum Cryptoticker.io^[5]. While Bitcoin's price briefly rebounded to $113,000, volatility remained high, and further declines loomed if the $110,000 level broke.

Market analysts attributed the crash to macroeconomic uncertainty rather than crypto-specific factors. "The tariffs reignite fears of a trade war, threatening inflation control and economic stability-the exact conditions that spook crypto investors," one analysis noted CoinTelegraph^[6]. The broader crypto market mirrored Bitcoin's collapse, with total market capitalization falling from $4.1 trillion to $3.6 trillion. DeFi, Layer 2s, and AI tokens all saw double-digit declines, underscoring the sector's deep integration with global trade dynamics BeInCrypto^[7].

The legal and political landscape added further uncertainty. A U.S. Court of Appeals ruled on August 29, 2025, that most of Trump's tariffs under the International Emergency Economic Powers Act were illegal, pending a Supreme Court review. While enforcement was delayed until October 14, the ruling introduced short-term volatility, with markets bracing for potential reinstatements Bitcoin Chaser^[8]. Meanwhile, Trump's proposal for a $2,000 "tariff dividend" stimulus check, funded by tariff revenues, sparked speculation about renewed inflows into Bitcoin and equities Forbes^[9].