Bitcoin News Today: Leverage's $19B Downfall: Tariffs Spark Crypto's Worst Liquidation in History

The cryptocurrency market reeled from its largest liquidation event in history on Oct. 10, as U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports triggered a $560 billion collapse in market value. Over $19 billion in leveraged positions were wiped out within 24 hours, with altcoins bearing the brunt of the sell-off while Bitcoin (BTC) demonstrated relative resilience, according to data from CoinGlass and analysis from Wiston Capital.

Prices for major cryptocurrencies plummeted amid renewed fears of a trade war. Bitcoin fell from a peak above $122,000 to $104,000, a 15% drop, while Ethereum (ETH) sank below $3,500. Altcoins like Solana (SOL) and XRP plummeted by double digits, with some tokens-such as Dogecoin (DOGE)-experiencing flash crashes exceeding 50% intraday losses. The crash was fueled by a cascade of automated responses: stop-loss orders, algorithmic trading bots, and leveraged positions triggering forced liquidations.

The liquidation event exposed vulnerabilities in leveraged trading. Most of the $19 billion in losses came from long positions, with a 6.7:1 ratio over short sellers, highlighting overexposure to bullish bets. A single whale capitalized on the turmoil, securing a $192 million profit from short positions within 30 minutes of the tariff announcement, raising questions about timing and potential manipulation. Exchanges like Binance and Coinbase faced system strain as liquidations surged, with Binance deploying $188 million from its insurance fund to stabilize futures markets.

Bitcoin's relative stability contrasted sharply with the chaos in altcoin markets. Analysts attributed BTC's performance to its "digital gold" narrative and growing institutional adoption, including ETF inflows and corporate treasury allocations. Despite the 10% drop, Bitcoin remained above its 200-day moving average ($106,800), suggesting the bull market remains intact. JPMorgan Chase maintains a $165,000 price target for BTC by 2025, citing ETF-driven demand.

The crash underscored the risks of leverage in crypto trading. Platforms offering 50x–100x leverage, particularly offshore exchanges, amplified losses as positions were liquidated rapidly. Retail traders, often unprepared for such volatility, faced total wipeouts on leveraged bets, while institutions quietly accumulated discounted assets, mirroring patterns seen in past market resets.

Wiston Capital emphasized that while the crash was a technical correction, Bitcoin's long-term fundamentals remain intact. The fixed 21 million coin supply and macroeconomic tailwinds, including ETF adoption, support its role as a hedge against inflation. However, the firm warned that leverage remains a double-edged sword, cautioning investors to avoid margin trading in favor of dollar-cost averaging or spot holdings to navigate volatility.

The market's recovery began by late Oct. 11, with Bitcoin rebounding toward $113,000 and Ethereum regaining $3,800. Analysts noted historical precedents, such as October's average 20% BTC gains post-crash, as potential indicators of a rebound. Yet, geopolitical risks-including Trump's tariffs taking effect Nov. 1-loom large, keeping traders on edge.

[1] Crypto's $200 Billion Crash: Can Bitcoin Hope to Recover? (https://247wallst.com/investing/2025/10/12/cryptos-200-billion-crash-can-bitcoin-hope-to-recover/)

[2] Crypto crash wrap: Bitcoin, Ethereum lead $560B... (https://invezz.com/news/2025/10/11/crypto-crash-wrap-bitcoin-ethereum-lead-560b-market-bloodbath-after-tariff-news/)

[3] Understanding the Crypto Crash: Analyzing the Market Downturn... (https://www.archyde.com/understanding-the-crypto-crash-analyzing-the-market-downturn-and-identifying-resilient-coins/)

[4] Crypto Market Crash Today [LIVE] Updates October 11th - Coinpedia (https://coinpedia.org/news/crypto-market-crash-today-live-updates-october-11th/)

[7] Trump's China tariff sends crypto exchanges into... (https://www.thestreet.com/crypto/business/trump-china-tariff-crypto-crash-exchange)

[8] Crypto market hit by biggest liquidation in history: $19B wiped out... (https://www.financialexpress.com/market/crypto-market-hit-by-biggest-liquidation-in-history-19b-wiped-out-after-trumps-china-tariffs-see-the-worst-hits-400746/)

[9] Trump's new 100% tariffs on China triggered an $18 billion crypto... (https://www.cnn.com/2025/10/11/business/trump-tariffs-crypto-selloff)

[12] Real-Time Cryptocurrency Liquidations Data (https://bitculator.com/en/crypto-liquidations)