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The cryptocurrency market lost about $150 billion in value on Friday, October 17, extending its ongoing downward trend. According to data from Finbold, the total valuation plunged from $3.7 trillion at 6 a.m. UTC to $3.55 trillion by 10 a.m. UTC, marking a 5.8% drop within just four hours.
Losses hit every major digital asset. Bitcoin fell 5.6%, while Ethereum dropped over 7.1%. XRP and Solana lost 7.69% and 8.23%, respectively. Cardano and Binance Coin saw sharper declines, dropping 9.84% and 11.93%. The sudden downturn shook investor confidence across global trading desks.
Amid the heavy losses, traders questioned one thing: how deep could this correction go before stability returns? The question looms large as macroeconomic concerns continue to mount.
The recession was coupled with an increase in trade tensions between the United States and China. Tariff and export control announcements have been cited as a cause by observers of the sharp decline. On October 16, President Donald Trump confirmed that Washington is now engaged in a trade war with Beijing, which heightened market anxiety.
His earlier call for 100% tariffs on Chinese imports continued to rattle investors. The growing uncertainty prompted traders to seek safer assets. Both digital and fiat markets faced increased pressure as investors sought stability amid the shifting geopolitical landscape.
Institutional investors’ cash holdings also hit a twelve-year low, revealing broader concerns about global liquidity and asset safety. Meanwhile, the global appetite for risk appeared to wane as more participants pulled back from high-volatility assets.
As crypto markets weakened, gold emerged as a preferred refuge. It reached $4,339 per ounce, gaining 1.14% in 24 hours. The metal’s steady ascent contrasted sharply with the sharp losses in digital assets.
The steep losses were not driven by sentiment alone. Heavy liquidations amplified the fall. Over $19 billion in leveraged crypto positions had been wiped out earlier in the week. When prices began to drop again, more traders faced margin calls, triggering a cascade of forced sales.
This feedback loop created additional selling pressure, worsening the already fragile market environment. Each liquidation cycle fueled more declines, revealing how dependent the market remains on leveraged bets and speculative activity.
There was also increasing caution on institutional flows. US-listed spot Bitcoin exchange-traded funds registered outflows of $536 million on October 16. Another withdrawal of $56.9 million was made by Ethereum ETFs, which suggests risk aversion by the large investors.
After such dramatic changes, analysts and traders now await confirmation that the situation is stabilizing. Others believe that the market may undergo a period of consolidation, where volatility remains high but the direction is unclear. In the case of Bitcoin, the price field between $104,000 and $108,000 has become a significant area of support.
The only factor that will determine whether the $150 billion wipeout is a one-time shock or the beginning of a long-term downturn is the rate at which investor confidence is regained.
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The loss of $150 billion in the crypto market highlights the fragility of digital assets during economic and geopolitical crises. Bitcoin and Ethereum plummeted sharply as traders responded to rising tensions between the US and China over trade and widespread liquidations. There was an increasing caution displayed in institutional outflows and a shift toward gold.
