Ethereum News Today: Leverage-Fueled Crypto Crash: $19B Wiped as Tariffs Spark Global Sell-Off

The global cryptocurrency market experienced its largest single-day liquidation event on October 10–11, 2025, with over $19.1 billion in positions wiped out, driven by a combination of geopolitical tensions, leveraged trading pressure, and macroeconomic uncertainty. Bitcoin (BTC) plummeted to $101,500 from an intraweek high of $126,000, while Ethereum (ETH) and altcoins like Solana (SOL) and XRP fell more than 15%. Total crypto market capitalization dropped from $4.15 trillion to $3.74 trillion, erasing $400 billion in value Forbes Digital Assets^[1].

The catalyst was U.S. President Donald Trump's announcement of a 100% tariff on Chinese imports starting November 1, 2025, in response to China's export controls on rare earth metals and critical software. This escalation, described as the "largest single-day liquidation in crypto history" by analysts, triggered immediate risk-off sentiment across global markets. CoinGlass data showed $7.5 billion in liquidations within one hour, with $3.3 billion attributed to Bitcoin and Ethereum alone Coindesk Markets^[2]. The move reignited fears of a full-scale trade war, mirroring tensions from 2019, and prompted investors to flee volatile assets.

The crash was exacerbated by excessive leverage in crypto derivatives markets. Over $16.7 billion in long positions and $2.4 billion in short positions were liquidated, with 1.4 million traders affected. Binance's futures insurance fund drained $188 million, while Hyperliquid processed $10.28 billion in total liquidations. Analysts noted that "leverage was the gasoline" behind the collapse, as cascading margin calls accelerated price declines. For instance, the largest single liquidation reached $203 million in ETH on Hyperliquid Coin360 News^[3].

Broader macroeconomic factors compounded the sell-off. U.S. Treasury yields surged, and the S&P 500 fell 3.6%, reflecting investor concerns over inflation and corporate margins. Tech and AI stocks, which had driven much of the crypto market's recent rally, also corrected, spilling over into digital assets. Additionally, the U.S. government shutdown delayed key inflation data, leaving markets to navigate uncertainty. Analysts at 10x Research highlighted that "the setup is both chaotic-and full of opportunity," as forced deleveraging exposed structural weaknesses in overleveraged altcoins BeInCrypto^[4].

The crash has prompted a defensive stance among traders, with inflows into stablecoins and gold. Spot gold surged past $4,000 per ounce as investors sought safe havens. While short-term volatility is expected to persist, some analysts view the selloff as a potential buying opportunity for institutional buyers. Zaheer Ebtikar of Split Capital noted that "once dealers fill long, they'll start unwinding spot and perp when equilibrium returns," suggesting a drawn-out bottoming process rather than a terminal decline.

The event underscores the crypto market's sensitivity to geopolitical and macroeconomic shifts. With Trump's tariff threat still unresolved and China's response uncertain, markets remain on edge. However, the resilience of on-chain infrastructure-such as stablecoin overcollateralization and DeFi protocols-has mitigated systemic risks, offering a glimmer of confidence in the sector's maturity.