Bitcoin News Today: Crypto's Leverage Crisis Unveiled as Markets Swing on Trump's Trade Rhetoric

Bitcoin rebounded 4.5% to $115,459 on Monday after U.S. President Donald Trump tempered his rhetoric on trade tensions with China, stabilizing markets that had earlier faced a historic $19.3 billion in liquidations Coindesk^[1]. The cryptocurrency had plummeted below $110,000 by late Saturday following Trump's announcement of a 100% tariff increase on Chinese imports, triggering a 10% drop in Bitcoin and a 14% collapse in Ethereum Techcabal^[2]. The sell-off, the largest single-day liquidation event in crypto history, saw over 1.6 million traders wiped out as leveraged positions unraveled Yahoo Finance^[3].

The initial volatility stemmed from Trump's Truth Social post accusing China of "hostile" trade practices, including rare earth export controls. This prompted a 2.7% drop in the S&P 500 and a 3.5% plunge in the Nasdaq on Friday Gadgets360^[4]. However, Trump's Sunday message-framing the U.S. as seeking to "help, not hurt" China-spurred a swift recovery. Bitcoin regained nearly half of its weekend losses, while Ethereum surged 11.3% to $4,161 Fortune^[5].

Institutional demand for Bitcoin ETFs remained resilient despite the selloff, with continued inflows signaling long-term confidence Techcabal^[2]. On-chain data indicated a flight to safety, as the Crypto Fear and Greed Index fell to 27 (from 64) in under 24 hours, reflecting heightened risk aversion Cryptodaily^[6]. Meanwhile, stablecoins like USDe briefly depegged to 65 cents on Binance before rebounding Fortune^[5].

Analysts attributed the rebound to de-escalation efforts, including comments from Treasury Secretary Scott Bessent, who confirmed "substantial communication" with China over the weekend. Greg Magadini of Amberdata noted that while the immediate risk of a trade war diminished, the structural vulnerability of crypto markets-marked by high leverage and thin liquidity-remains Cryptodaily^[6].

Polymarket data showed a sharp decline in odds of Trump imposing the 100% tariff by November 1, from 26% to 8%, suggesting market skepticism about the policy's execution BeInCrypto^[7]. Traders speculated that Trump's timing-issuing the warning late Friday-allowed crypto markets to absorb the shock before traditional markets opened Monday, minimizing spillover effects BeInCrypto^[7].

The recovery, however, left scars. Altcoins like Solana and XRP saw double-digit declines, with $SUI nearly collapsing to zero before stabilizing near $2.81 Gadgets360^[4]. Despite this, on-chain indicators pointed to a potential rebound, with Ethereum reclaiming key support levels and the Total2 altcoin market cap rising to $1.44 trillion from a low of $1.18 trillion Gadgets360^[4].