Bitcoin News Today: Crypto's 'Cleanse' Unfolds: $20B Liquidation as Trade Tensions Spark Sell-Off

Bitcoin (BTC) traded near three-week lows around $110,000 following a record $20 billion liquidation event, with traders and analysts cautioning that the market is far from finding a bottom. The selloff, driven by escalating U.S.-China trade tensions and macroeconomic uncertainty, triggered widespread forced closures of leveraged positions across crypto derivatives, according to data from CoinGlass and Cointelegraph Markets Pro. Long positions accounted for the bulk of the damage, with Bitcoin and Ethereum bearing the brunt of the losses at $5.38 billion and $4.43 billion, respectively Yahoo Finance^[3].

The price action failed to rebound from multi-week lows, with Bitcoin's relative strength index (RSI) plunging to levels not seen since the onset of the trade war in February. A four-hour RSI reading of 19.76 indicated deeply oversold conditions, a pattern observed before previous market corrections Cointelegraph^[1]. "The crypto cleanse has begun," warned trader Roman, noting that over 30 million altcoin tokens-many from scam projects-would likely face further liquidation as the market sheds bull-market euphoria Cointelegraph^[1].

The liquidation cascade was exacerbated by thin liquidity and imbalanced order books. Resistance clustered around $120,000, while support near $100,000 remained vulnerable, per a CoinGlass heatmap Cointelegraph^[1]. Skew, a prominent trader, highlighted that exchanges like Binance and Coinbase faced challenges during the volatility, with Binance processing 81.9K BTC in volume during a single 4-hour candle Cointelegraph^[1]. Meanwhile, the Coinbase Premium Gap surged to 91.68, signaling strong U.S. institutional demand despite the turmoil .

Market participants pointed to Trump's 100% tariff announcement on Chinese imports as a catalyst for risk-off sentiment. The move triggered a broader sell-off in equities and safe-haven flows into gold, which hit a record $4,002.95 per ounce Brave New Coin^[5]. However, crypto markets remained uniquely vulnerable due to high leverage. Bloomberg reported that over $7 billion in liquidations occurred within a short window, amplifying the downturn Zoombangla^[2].

Institutional demand provided some counterbalance. Bitcoin's open interest (OI) hit a new all-time high of $45.3 billion, reflecting sustained bullish positioning . ETF inflows also supported the market, with BlackRock and Fidelity reporting strong demand for Bitcoin products . Whale activity further reinforced the narrative, as a major buyer acquired $80 million in BTC on Binance and transferred it to a self-custody wallet .

Technical indicators suggested a potential rebound. Bitcoin stabilized above $122,000 after a 4% pullback, with net taker volume shifting to neutral levels-a sign of controlled profit-taking rather than panic . Analysts noted that the $120,000–$121,000 zone had transitioned from resistance to support, and a sustained break above $125,000 could trigger renewed momentum .

Despite these signs, caution persisted. The market's fragility was underscored by a recent $1.6 billion liquidation event, the largest since March, as ether and Bitcoin fell amid declining demand from digital-asset treasuries Brave New Coin^[5]. "This isn't the bottom," Roman reiterated, emphasizing that macroeconomic risks-such as Trump's potential tariff escalation-could extend the downturn Cointelegraph^[1].