Bitcoin News Today: Trade War Fears Send Bitcoin into Tailspin, Echoing 2019 Chaos

Bitcoin investors face heightened volatility as U.S. President Donald Trump's proposed tariffs on China trigger sharp market corrections. On October 10, 2025, Bitcoin (BTC) fell below $119,000 after Trump announced a "massive increase" in tariffs on Chinese goods in response to export controls on rare earth metals. The move sent global crypto markets reeling, eroding nearly $125 billion in value within hours and triggering over $824 million in liquidations across leveraged positions . Ether (ETH) and Solana (SOL) also plummeted, with ETH sliding 4.7% to $4,104, while stocks like Circle (CRCL) and Coinbase (COIN) dropped 5%-6% .

The sell-off mirrored broader market turbulence, with the S&P 500 and Nasdaq falling 1.6% and 1.3%, respectively, as traders rotated into traditional safe-haven assets like gold, which surged over 1% to $4,000 per ounce . Analysts attributed the sharp decline to renewed fears of a U.S.-China trade war, exacerbated by Trump's cancellation of a planned meeting with Chinese President Xi Jinping and his threats to impose tariffs on $1 trillion of imports annually . The move revived memories of past tariff-driven market shocks, such as the 2019 trade war, and intensified uncertainty ahead of the November U.S. election .

Market participants warned that volatility could persist for weeks if trade tensions escalate. Short-term liquidity constraints and leveraged unwinding further compounded risks, with Bitcoin hovering near $115,000–$118,000 and altcoins under sustained pressure . Derivatives data highlighted a "cascade" of liquidations, particularly in long positions, as ETH's price broke key support levels, triggering $235 million in losses . Meanwhile, institutional traders shifted risk appetite toward stablecoins and U.S. Treasuries, signaling a broader "risk-off" environment .

Technical analysts noted that Bitcoin's recent pullback, while steep, aligned with historical patterns. Omkar Godbole of CoinDesk observed that BTC's decline reflected profit-taking after hitting a record $126,000 earlier in October, alongside dollar strength and weak on-chain activity . However, bullish indicators emerged in ETF inflows, with BlackRock's IBIT on track to surpass $100 billion in assets under management, driven by $3 billion in weekly inflows . The fund's rapid growth underscored crypto's growing integration into traditional finance, even as regulatory scrutiny intensified.

Longer-term observers highlighted structural risks in the crypto market. Alex Blume of Two Prime cautioned that leveraged trading, rather than spot demand, had fueled the recent rally, with perpetual futures fund rates spiking to 13%-a sign of speculative excess . Similarly, Wintermute strategist Jasper De Maere noted that institutional infrastructure, including spot ETFs and custody solutions, had matured since 2020, yet retail-driven volatility remained a wildcard . The market's sensitivity to macroeconomic shifts, such as the Fed's rate-cut cycle and U.S. government shutdown risks, further complicated outlooks .

Despite the near-term turbulence, some analysts remained cautiously optimistic. Sean Dawson of Derive.xyz noted that implied volatility across Bitcoin options had hit 30-day highs, reflecting anticipation of large price swings ahead of the Fed's October rate decision . Meanwhile, 10x Research analysts observed a "mismatch" between Bitcoin's seasonal rally and underlying fundamentals, with institutional whales accumulating while early adopters sold into strength . The coming weeks will test whether the market can absorb Trump's tariff rhetoric without triggering a deeper correction.

[1] Coindesk (https://www.coindesk.com/markets/2025/10/10/trump-tariff-threat-on-china-sends-bitcoin-tumbling-below-usd119k)

[2] Forbes (https://www.forbes.com/sites/digital-assets/2025/10/05/trumps-2000-tariff-dividend-stimulus-check-idea-could-be-about-to-blow-up-the-bitcoin-price-crypto-and-stock-market/)

[3] BeInCrypto (https://beincrypto.com/trump-china-traiff-threat-crypto-market-cr/)

[4] Decrypt (https://decrypt.co/343834/bitcoin-ethereum-dive-alongside-stocks-trump-threatens-massive-china-tariffs)

[5] Seeking Alpha (https://seekingalpha.com/news/4503347-bitcoin-breaks-below-120k-after-trumps-massive-tariff-threat-to-china)

[6] Forbes (https://www.forbes.com/sites/digital-assets/2025/10/09/bitcoin-falls-below-120000-as-multiple-factors-fuel-losses/)

[7] Coindesk (https://www.coindesk.com/markets/2025/10/07/onwards-and-upwards-for-bitcoin-as-move-melts-down-dollar-and-bonds-signal-caution-to-risk-assets)

[8] Yahoo Finance (https://finance.yahoo.com/news/ethers-7-plunge-leads-crypto-185135928.html)

[9] Forbes (https://www.forbes.com/sites/digital-assets/2025/10/10/blown-away-bitcoin-braced-for-a-100-billion-blackrock-earthquake-as-wild-price-swings-rock-crypto/)

[10] Coindesk (https://www.coindesk.com/markets/2025/10/05/xrp-surges-above-usd3-traders-eye-move-to-usd4-on-fresh-bitcoin-highs)