Bitcoin News Today: Trump's Tariff Gambit Exposes Crypto's Leverage Fragility

Source: [1] Coindesk (https://www.coindesk.com) [2] Cryptobriefing (https://cryptobriefing.com) [3] Financial Express (https://www.financialexpress.com) [4] CoinGlass (https://coinglass.com) [5] CoinMarketCap (https://coinmarketcap.com) [6] BeInCrypto (https://beincrypto.com) [7] Analytics Insight (https://www.analyticsinsight.net) [8] Cointelegraph (https://cointelegraph.com) [9] Coinotag (https://en.coinotag.com) [10] Morningstar (https://www.morningstar.com) [11] YCharts (https://get.ycharts.com) [12] Investopedia (https://www.investopedia.com) [13] MarketWatch (https://www.marketwatch.com) [14] Seeking Alpha (https://seekingalpha.com) [15] The Wall Street Journal (https://www.wsj.com)

Global crypto markets experienced a historic liquidation event on October 10–11, 2025, as U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports triggered a $19.5 billion collapse in leveraged positions, marking the largest single-day wipeout in digital asset history. Bitcoin (BTC) and Ethereum (ETH) led the selloff, with BTC plummeting from $126,000 to $102,000 within hours, while ETH dropped below $4,000 for the first time in months. Over 1.6 million traders were liquidated across major exchanges, with long positions accounting for $16.7 billion of the total losses .

The sell-off was exacerbated by thin liquidity and clustered stop-loss orders, creating a cascading effect. CoinGlass data showed $19.38 billion in liquidations within 24 hours, with $16.87 billion from longs and $2.51 billion from shorts. The largest single liquidation, a $203.36 million ETH-USDT position on Hyperliquid, underscored the scale of forced exits . Bitcoin's dominance in the crypto market surged to 59.8%, while altcoins like Solana (SOL) and Dogecoin (DOGE) saw double-digit declines, with SOL dropping 18% and DOGE falling 24% .

The crash followed weeks of speculative fervor, with Bitcoin hitting a record $125,000 in early October. However, Trump's trade war rhetoric reignited macroeconomic fears, pushing investors toward safer assets. Gold prices rose to $3,886 per ounce, while U.S. Treasury bonds saw inflows as equity markets also wavered. The S&P 500, which has outperformed Bitcoin in 2025, closed at $6,715.79 but faced renewed volatility amid uncertainty over the Federal Reserve's October rate decision .

Analysts attributed the crypto market's fragility to excessive leverage and thin liquidity, particularly over the weekend. NuPL (Net Unrealized Profit/Loss) remained at 0.51, indicating many investors still held unrealized gains, suggesting the market had not yet reached a true capitulation bottom . Meanwhile, institutional activity offered a counterbalance: Binance's spot trading volume hit $12.6 billion during the crash, absorbing forced selling and stabilizing order books .

The geopolitical trigger-Trump's 100% tariff threat-was compounded by a partial U.S. government shutdown, which delayed critical economic data and clouded the Fed's policy outlook. The shutdown left the Bureau of Labor Statistics unable to release the September jobs report, a key input for the October 29 FOMC meeting. Market expectations for a 25-basis-point rate cut stood at 96.2%, but analysts warned of a potential pause if inflation risks persisted .

In the broader stock market, the so-called "Magnificent Seven" tech stocks-Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA, and Tesla-showed mixed performance. While NVIDIA and Microsoft gained on AI-driven optimism, Tesla and Amazon lagged amid concerns over cloud growth and EV market saturation. The S&P 500's top 10 holdings now account for 34.85% of the index, highlighting continued concentration risks .

Crypto's "Magnificent Seven" narrative, however, faced challenges as speculation superapps like Hyperliquid, Polymarket, and Pump.fun struggled to sustain momentum. Despite Pump.fun's $3.12 million daily revenue spike, skeptics questioned its viability in a bear market. Stablecoin protocols remained pivotal, but their role in liquidity infrastructure underscored crypto's reliance on traditional financial systems .

As of October 11, Bitcoin traded at $111,500, with its market cap at $2.22 trillion. While some analysts viewed the crash as a necessary correction, others warned of further volatility if geopolitical tensions or regulatory shifts disrupted markets. The Fed's policy path and China's response to U.S. tariffs will likely dictate the next phase of crypto and stock market dynamics .