Crypto News Today: Market Plunge Sparks $19 Billion in Liquidations as US–China Trade Tensions Escalate

On Friday, Bitcoin experienced a sharp decline, dropping below $108,000 amid escalating tensions between the United States and China. The decline followed soon after US President Donald Trump announced that he would levy a 100% tariff on Chinese imports starting November 1, 2025. 

The move followed Beijing's announcement of severe export quotas on rare-earth minerals and goods derived from them, actions that have the potential to disrupt global supply chains.

The announcement created a risk aversion for financial markets around the world. Significant indexes of the US dropped dramatically, with the S&P 500 declining by approximately 2% and the NASDAQ decreasing by 2.7%.

Trump also canceled a planned meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit, a sign of further tension in bilateral relations. Analysts reported that the increase in tariffs sparked fears of another trade war, similar to the previous US-China conflicts.

Bitcoin fell to its lowest point of approximately $105,896 at certain exchanges before climbing slightly higher to rebound to $112,000, having previously traded at around $120,000 before the announcement. 

A decline in other digital currencies accompanied the sharp decline in the cryptocurrency, as Ethereum fell 17% and XRP fell over 30% in value. 

Equities associated with cryptos suffered too. Shares of Coinbase (COIN), Robinhood (HOOD), Circle (CRCL), and MicroStrategy (MSTR) more or less dropped by 3-12 percent throughout the trading day.

Widespread Crypto Market Liquidations and Market Volatility

The sell-off triggered massive liquidations throughout the cryptocurrency community simultaneously. As noted by Coinglass, the equivalent of nearly 19 billion leveraged positions was wiped out in 24 hours, comprising approximately $16.7 billion in long positions. 

This was among the most significant single-day liquidations in the history of cryptocurrencies. Major altcoins, such as BNB and Dogecoin, dropped by 20% - 40%, resulting in a 15% decrease in total market capitalization to $3.59 trillion.

Swan Bitcoin CEO Cory Klippsten termed the occurrence as "macro whiplash," where Bitcoin tends to respond particularly to abrupt changes in policy and then stabilize. He further wrote that the market may remain in turbulence as traders adapt to new geopolitical and economic realities. Several analysts noted a moment of dislocation in Bitcoin prices on exchanges, indicating the magnitude of the cascading liquidations and the panic of leveraged traders.

Analysts Highlight Possible Recovery Potential

Some analysts expressed optimism despite the downturn. Juan Leon, the senior strategist at Bitwise Invest, said that when a macroeconomic shock corrects the market, it can create buying opportunities. On the same note, Bitwise CIO Matt Hougan said that, during market downturns, investors are often reluctant to invest, despite strong fundamentals.

Bitcoin is trading up over 30% year-to-date, underpinned by steady inflows into U.S.-listed Bitcoin exchange-traded funds and increased institutional interest. Analysts suggest that as sentiment stabilizes and macroeconomic pressures ease, Bitcoin may resume its upward trend over the next several weeks, potentially reaching the $130,000 level. However, the current trade tensions and general market uncertainty are likely to persist and continue causing volatility in the short term.

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