Bitcoin News Today: Trump's Tariffs Ignite Crypto Earthquake: $19B Liquidations as Trade War Looms
Aime SummaryThe cryptocurrency market faced a severe downturn in early October 2025, with BitcoinBTC-- (BTC) and EthereumETH-- (ETH) plummeting to multi-week lows amid renewed trade war fears and leveraged liquidations. Bitcoin fell below $110,000, a 10% drop from its peak, while Ethereum dropped over 12% to $3,795. The total crypto market cap contracted to $3.69 trillion, erasing $800 billion in value within 24 hours . Over $19.16 billion in leveraged positions were liquidated, with long positions accounting for $16.7 billion of the losses [1]. This marked the largest liquidation event in crypto history, surpassing previous crises like the 2022 FTX collapse and the 2020 pandemic crash [1].
The catalyst for the selloff was former U.S. President Donald Trump's announcement of 100% tariffs on Chinese imports and export restrictions on critical software, effective November 1. The move reignited fears of a U.S.-China trade war, triggering a global risk-off environment. Bitcoin dropped from a record high of $125,000 to as low as $102,000 within hours, while altcoins like SolanaSOL-- (SOL) and XRPXRP-- fell by over 50% [7]. The S&P 500 also declined 2.7%, reflecting broader macroeconomic concerns [4].
Leveraged traders bore the brunt of the crash. Coinglass reported $19.13 billion in liquidations, with Binance's futures insurance fund deploying $188 million to stabilize positions [1]. Hyperliquid, a decentralized exchange, saw a $203 million Ethereum position liquidated, while over 1.6 million traders were wiped out [7]. Analysts attributed the crash to overleveraged positions and fragile liquidity in altcoins, with cross-margin accounts exacerbating the sell-off .
Technical indicators pointed to a critical juncture for Bitcoin. The cryptocurrency briefly dipped below $102,000, testing a key support level that had held for three years. On-chain analytics firm CryptoQuant highlighted that Bitcoin's short-term holders' average cost basis of $112,200 could act as a major support line [2]. Ethereum's Wyckoff accumulation phase, a sign of institutional buying, was nearing its final stage, with analysts like ZYN projecting a potential rebound to $8,000 by year-end [2].
Market participants remained divided on the long-term outlook. While some viewed the crash as a deleveraging event that could pave the way for a healthier bull market, others warned of contagion risks. Arthur Hayes of BitMEX noted that the selloff could signal a market reset, with high-quality altcoins unlikely to revisit current lows soon [7]. Conversely, Peter Schiff, a Bitcoin critic, cautioned that Ethereum's 21% decline posed a risk of falling to $1,500 if key support levels failed [4].
The U.S. government shutdown further compounded uncertainty by delaying key economic data releases, leaving traders navigating without official indicators. Meanwhile, the SEC's push for an "innovation exemption" to support crypto firms by year-end was seen as a potential long-term catalyst [3]. Institutional adoption also gained traction, with companies like Brera Holdings rebranding to Solmate and accumulating $4 billion in Solana (SOL) on their balance sheets [3].
Bitcoin's price action suggested resilience. Despite the sharp decline, the asset remained above its 200-day simple moving average ($106,800), with analysts like Ryan Lee of Bitget viewing the drop as a healthy correction rather than a trend reversal [5]. The TimeValue indicator, which historically identifies market bottoms, signaled potential accumulation opportunities for prepared investors [4]. However, the path to recovery would depend on Trump's trade policies and China's response, with further escalations risking prolonged volatility.
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