Bitcoin News Today: Trump Tariffs Trigger $19B Crypto Liquidation, Forcing Healthy Market Reset

Bitcoin recovers swiftly from a historic liquidation event triggered by geopolitical tensions and market volatility, with the cryptocurrency surging to $113,294 as of October 11, 2025, following a sharp decline below $110,000 earlier in the week. The global crypto market faced its largest single-day liquidation in history, with $19.1 billion in positions wiped out, driven by U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports and renewed trade war rhetoric. The total crypto market cap fell to $3.87 trillion, with Bitcoin and Ethereum experiencing significant price swings amid heightened volatility .

The liquidation event dwarfed previous market crashes, including the $1.2 billion loss during the 2020 COVID-19 lockdowns and the $1.6 billion loss during the FTX collapse in 2022. By midday China Hong Kong time, over $16.7 billion in long positions were liquidated, with Ethereum briefly dipping to $3,844 before rebounding. The CoinDesk 20 Index fell 12.1%, reflecting broad-based selling pressure across the crypto sector. Analysts noted that the scale of the liquidation was exacerbated by leverage and macroeconomic uncertainty, with the U.S. government shutdown delaying key economic data releases and amplifying market anxiety .

Bitcoin's recovery was supported by reduced selling pressure from long-term holders and institutional accumulation. On-chain data from Glassnode revealed that mid-sized investors, or "sharks," holding 100–1,000 BTC added 65,000 BTC in a single week, signaling strong conviction in Bitcoin's long-term potential. These entities now control 18.32% of the circulating supply, totaling 3.65 million BTC, as of October 2025. The accumulation reduced exchange-held liquidity to less than 10% of the total supply, creating a structural supply squeeze that analysts linked to upward price momentum .

Ethereum also showed resilience, recovering to $3,844 after a brief drop to $3,373.67. The broader altcoin market, however, faced severe losses, with tokens like XRP, DOGE, and ATOM experiencing intraday crashes exceeding 99%. Stablecoin pegs were tested, as Ethena's USDe briefly depegged to $0.9996, highlighting liquidity strains in derivatives markets. Despite these challenges, Ethena confirmed that its stablecoin remained operational, with overcollateralization providing a buffer against volatility .

Market analysts attributed the crash to a combination of hidden leverage, thin liquidity in altcoins, and the unwinding of yen carry trades. The yen's appreciation triggered margin calls across leveraged positions, creating a cascading effect in global markets. Additionally, Trump's tariff announcement hit at a vulnerable moment, as the crypto market had been overbought after a six-month rally. The timing amplified the impact of pre-existing leverage, with exchanges like Hyperliquid reporting $10.28 billion in total liquidations during the event .

Looking ahead, experts highlighted a potential path for recovery. Bitcoin's on-chain metrics, including reduced exchange outflows and increased active addresses, suggested a maturing market structure. Institutional demand for Bitcoin ETFs remained robust, with BlackRock's IBIT managing $86 billion in assets. While short-term volatility persisted, analysts like Lark Davis emphasized that the event marked a "healthy reset" for the market, flushing out excessive leverage and setting the stage for a more sustainable bull cycle .

Sources:

[1] CoinDesk. (2025, October 10). "USD16B in longs liquidated as Wall Street sell-off extends." (https://www.coindesk.com/markets/2025/10/10/usd16b-in-longs-liquidated-as-wall-street-sell-off-extends-btc-eth-broader-crypto-market-meltdown)

[2] Coin360. (2025, October 10). "Crypto Market Hit by $19B Liquidation, $400B Wipeout." (https://coin360.com/news/crypto-market-liquidation-2025-trump-tariffs)

[3] blog.millionero.com. (2025, October 10). "The October 2025 Market Crash: A Historic Liquidation Event." (https://blog.millionero.com/blog/the-october-2025-market-crash-a-historic-liquidation-event)

[4] Glassnode. (2025, September 13). "Bitcoin Shark Wallets Set New Record: Bullish Implications." (https://www.mitrade.com/insights/news/live-news/article-3-595811-20250125)