Ethereum News Today: Trade War Fears Trigger $600M ETH Liquidations as Trump's Tariffs Shake Crypto Markets
Ether's 7% Plunge Leads Crypto Liquidations in $600M Carnage
Ethereum (ETH) experienced a sharp 7% decline on October 10, 2025, triggering over $600 million in liquidations across crypto derivatives markets as U.S.-China trade tensions escalated following President Donald Trump's threats of massive tariff hikes on Chinese goods [1]. The drop pushed ETHETH-- below $4,100 for the first time since late September, outpacing Bitcoin's 3.5% decline and leading the CoinDesk 20 Index's 5% slump [1]. Liquidation data from CoinGlass revealed that ETH accounted for $235 million in long position closures, with leveraged traders bearing the brunt of the sell-off [1].
The sell-off was driven by Trump's announcement of retaliatory tariffs against China's rare earths export controls and his cancellation of a planned meeting with Chinese President Xi Jinping. This triggered a broader market selloff, with the S&P 500 erasing $1.2 trillion in value and the crypto market capitalization plummeting by $125 billion within hours . ETH's price collapse coincided with a breakdown of critical technical support levels, including a failed recovery attempt at $4,141 and a key resistance zone at $4,287 [1]. Volume surged to 372,211 ETH units during the downturn, nearly double the 24-hour average, as panic selling intensified [1].
The liquidation wave highlighted the fragility of leveraged positions in crypto markets. Over $536 million in positions were wiped out in the preceding 24 hours, with ETH leading at $212.9 million [2]. Analyst Andrew Kang of Mechanism Capital warned that further breaches below $4,000 could trigger an additional $1.19 billion in cascading liquidations, potentially driving ETH toward $3,200–$3,600 [2]. This risk is compounded by a record 2.44 million ETH ($10 billion) in Ethereum's validator exit queue, which could add to market pressure as stakers withdraw funds over the next 42 days [3].
Institutional demand for ETH provided some counterbalance. Spot ETF inflows hit $621.4 million in October, with corporate treasuries and ETFs collectively holding 12.47 million ETH (10.29% of supply) [3]. However, ETF outflows of $59.3 million and a $54 million whale transfer to exchanges in late August signaled profit-taking and added downward pressure [2].
The broader crypto market mirrored ETH's turmoil. Altcoins like SolanaSOL-- (SOL) and XRPXRP-- fell over 2%, while memeMEME-- coins like DogecoinDOGE-- (DOGE) and Shiba InuSHIB-- (SHIB) tumbled 5–15% [6]. Total exchange volume surged to $9.72 trillion in August, but liquidity concerns persisted as traders navigated heightened volatility [1].
Technical analysis suggested potential stabilization near $4,100, where buying activity emerged [1]. However, analysts cautioned that without sustained institutional support or a resolution to trade tensions, the market could face further volatility. XWIN Finance predicted ETH could still reach $10,000 this cycle, citing macro liquidity and dwindling exchange reserves [3].
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