Bitcoin News Today: Trump Tariffs and Fed Fog Trigger Record $19B Crypto Liquidation

The crypto market experienced its largest liquidation event on record, with $19.1 billion in leveraged positions wiped out in a 24-hour period as global risk-off sentiment intensified following U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports. The selloff, triggered by renewed trade war fears and delayed key economic data due to the U.S. government shutdown, saw Bitcoin (BTC) and Ethereum (ETH) plunge to multi-month lows. BTC fell below $110,000, marking a 10% decline over 24 hours, while ETH dropped to $3,844, erasing roughly $670 billion in total market value. The liquidation volume exceeded previous record events, including the $1.6 billion wipeout during the 2022 FTX collapse and the $1.2 billion liquidations observed during the 2020 pandemic crash Coindesk^[1].

The crash was exacerbated by cascading leveraged long positions, particularly in BTC and ETH, which accounted for $3.3 billion of the $9.6 billion in total liquidations over the past 24 hours Coin360^[3]. Derivatives platforms recorded over 1.6 million traders liquidated, with altcoins suffering disproportionately larger losses. For instance, XRP and Solana dropped over 8% within hours, while smaller tokens saw declines exceeding 99%. The Ethena stablecoin USDe briefly deviated from its $1 peg to $0.9996, highlighting systemic fragility in derivatives markets during sharp volatility Coindesk^[1].

Market analysts attributed the turmoil to a combination of macroeconomic uncertainty and structural leverage. The Federal Reserve's delayed September CPI data release left traders navigating without critical inflation metrics, while Trump's trade policies heightened fears of renewed protectionism. "The setup is both chaotic and full of opportunity," noted 10x Research analysts, citing negative funding rates and deepening short-term volatility as potential catalysts for rebounds Coin360^[3]. Meanwhile, the Fed's recent 25-basis-point rate cut in October 2025, coupled with a revised inflation forecast of 2.5%, introduced further ambiguity. Chair Jerome Powell's hawkish tone during post-meeting remarks-signaling only two additional rate cuts in 2025-spurred risk-averse behavior, pushing BTC below key support levels .

Institutional activity underscored the market's resilience amid the turmoil. U.S. spot ETFs continued to attract inflows, with BlackRock's IBIT ETF alone drawing $426 million in a single day. Morgan Stanley expanded crypto access for all clients, and ICE's $2 billion investment in prediction platform Polymarket signaled growing institutional confidence. However, critics highlighted the limitations of ETFs, which remain bound to traditional market hours, leaving investors vulnerable to overnight crypto volatility Coin360^[3].

Looking ahead, analysts remain divided. While some, like Arthur Hayes of BitMEX, anticipate a Bitcoin bull run by 2026 as Fed easing takes effect, others caution against overleveraging. "The extreme volatility highlights why 24/7 liquidity is essential," said Xapo Bank's Tommy Doyle, noting that institutional investors with direct crypto access can better navigate weekend price swings. The market's ability to recover from previous liquidations-such as the 30% rally in BTC and 110% rebound in ETH following the March 2025 crash-suggests potential for a rebound, though regulatory scrutiny and macroeconomic headwinds could temper gains .