Bitcoin News Today: Trade War Fears Spark $125B Crypto Crash, Markets Reel

The global crypto market experienced a sharp sell-off in late October 2025 following U.S. President Donald Trump's announcement of a 100% tariff increase on Chinese imports, escalating trade tensions and triggering volatility across digital and traditional asset classes. Bitcoin (BTC) plummeted below $110,000, a 12% drop over 24 hours, while Ethereum (ETH) and Solana (SOL) fell 16% and 20%, respectively. The total crypto market capitalization dipped nearly $125 billion within hours, according to CoinGecko, with over $7 billion in leveraged positions liquidated Coindesk^[1]. Analysts attributed the crash to a "risk-off" shift driven by fears of a renewed U.S.-China trade war and macroeconomic uncertainty Beincrypto^[2].

The sell-off mirrored broader market turmoil. The S&P 500 erased $1.2 trillion in value within 40 minutes of Trump's announcement, and WTI crude oil fell nearly 4% FXStreet^[3]. Gold, meanwhile, surged over 1% to $4,000 per ounce as investors flocked to safe-haven assets, underscoring the "debasement trade" trend where inflation and currency depreciation drive demand for hard assets like gold and Bitcoin CNBC^[4].

Market participants highlighted the interconnectedness of crypto and traditional finance. "The altcoin complex got absolutely eviscerated," noted Zaheer Ebtikar of Split Capital, adding that leveraged positions were "flushed out in a flash" Coindesk^[1]. Bob Loukas, a prominent trader, compared the crash to the March 2020 liquidity crisis, while Ram Ahluwalia of Lumida Wealth cited "overbought conditions" as a catalyst for the sharp decline Coindesk^[1].

Historical patterns suggest the volatility could persist. The crypto market has faced four major "winters" since 2011, each preceded by speculative bubbles and macroeconomic shocks. A 2025 analysis by Yahoo Finance projected the next bear market to begin between Q4 2026 and Q2 2027, citing institutional adoption, policy easing, and speculative excess as key drivers Yahoo Finance^[5]. Short-term analysts warned that unresolved U.S.-China tensions could extend the downturn, with leveraged unwinding and stablecoin rotation intensifying if further tariffs or retaliatory measures are enacted Beincrypto^[2].

The immediate impact on crypto-linked equities was severe. Coinbase (COIN), Robinhood (HOOD), and MicroStrategy (MSTR) fell 5%-6%, while Circle (CRCL) dropped over 6% Coindesk^[6]. Altcoins like XRP and Dogecoin (DOGE) saw double-digit declines, exacerbating concerns about liquidity and leverage. CoinGlass data revealed that long positions accounted for over 88% of liquidations, with Ethereum bearing the brunt at $309 million in closed positions .

Despite the turmoil, some analysts viewed the dip as a cyclical correction rather than a reversal. Bitcoin remains up over 30% year-to-date, and the Federal Reserve's anticipated rate cuts could reignite risk appetite. "This is a classic euphoria phase," noted one analyst, suggesting Bitcoin could test $180,000 before a potential top Techstory^[7]. However, geopolitical unpredictability and regulatory shifts remain critical risks.