Bitcoin News Today: Trade Tensions Expose Crypto's Fragility as Markets Seek Safety

The U.S. and China trade tensions, reignited by President Donald Trump's threat of a "massive increase" in tariffs on Chinese goods, triggered a sharp sell-off in technology and cryptocurrency markets on October 10, 2025. Bitcoin (BTC) fell below $119,000, a 2% decline from its recent peak, while Ethereum (ETH) and Solana (SOL) dropped 4.4% and 3%, respectively Coindesk^[1]. Crypto-related stocks, including Coinbase (COIN), Robinhood (HOOD), and Circle (CRCL), declined 5%-6% as investors sought safer assets like gold, which rose over 1% Invezz^[2]. The S&P 500 and Nasdaq Composite closed 2.71% and 3.56% lower, with tech stocks like Nvidia (NVDA) and Advanced Micro Devices (AMD) falling 4.95% and 7.78% KRDO^[3].

The tariff threat followed China's new rare earth export controls, prompting Trump to cancel a planned meeting with Chinese President Xi Jinping. This escalation revived fears of a trade war, with WTI crude oil dropping 4% to a five-month low and the CBOE Volatility Index surging 32% The Block^[4]. Market participants noted a correlation between U.S.-China trade policy and crypto volatility. For instance, Bitcoin's 3% drop mirrored the broader risk-off sentiment, as investors shifted to gold and Treasuries MEXC^[5].

Regulatory delays exacerbated the sell-off. The U.S. government shutdown paused the Securities and Exchange Commission's (SEC) approval processes, including crypto-related filings, adding to uncertainty MEXC^[6]. Analysts highlighted that cryptocurrencies, while not directly impacted by tariffs, are highly sensitive to geopolitical and macroeconomic shifts. For example, Bitcoin's price action in October echoed its April 2025 volatility, when similar trade tensions caused a 6% decline Coingabbar^[7].

The impact extended to traditional markets. U.S. rare earth companies like USA Rare Earth (USAR) and MP Materials (MP) gained 4.96% and 8.37%, respectively, as investors speculated on supply chain disruptions Thebitjournal^[8]. However, tech and AI stocks, which rely heavily on Chinese manufacturing, bore the brunt of the selloff. José Torres of Interactive Brokers noted that these sectors are "most at risk to the economic outlook worsening" due to potential trade war spillovers Cointelegraph^[9].

Looking ahead, market participants are monitoring the outcome of U.S.-China trade talks in London, which could either stabilize or further destabilize crypto and equity markets. If tensions persist, Bitcoin and Ethereum may face renewed downward pressure, with ETH at risk of a 18% drop to $3,550 based on technical indicators Coinpedia^[10]. Conversely, a resolution could spur a rebound, as seen historically during Q4 rallies .