- The cryptocurrency market experienced over $19 billion in liquidations on Friday, marking the largest wipeout in history amid escalating US-China tariffs.
- Bitcoin plunged to around $102,000 but has since climbed back above $114,000, with Ethereum rebounding to over $4,100.
- Analysts attribute the crash to overleverage and geopolitical catalysts, viewing the recovery as a positioning reset that may preserve the ‘Uptober’ uptrend.
The cryptocurrency market is stabilizing after a chaotic Friday sell-off that erased billions in leveraged positions, driven by fresh US-China trade war fears.
Geopolitical Trigger: The downturn began following President Donald Trump’s announcement of a 100% tariff on Chinese imports, in response to Beijing’s curbs on rare earth exports. This macro event, combined with thin weekend liquidity, amplified the sell-off across major assets.
Bitcoin (BTC) dropped as low as $101,500 from a peak of around $122,000, according to data from The Block and Cryptopress. Ethereum fell to $3,500 before recovering.
Record Liquidations: Over 1.6 million traders were liquidated, with long positions accounting for the majority—around $16.7 billion—per reports from Decrypt and Cointelegraph. This surpassed previous events like the 2022 FTX collapse.
Altcoins faced steeper losses, with Solana dropping 22% and some tokens like Dogecoin halving in value temporarily. The total market cap shed approximately $600 billion.
Recovery Momentum: By Monday, Bitcoin traded at $114,738, up 3%, while Ethereum rose 8.5% to $4,132, as per CoinDesk. Analysts note a mechanical rebound from flushed leverage and easing tariff concerns.
Vincent Liu, chief investment officer at Kronos Research, stated: “Despite the weekend whiplash, the ‘Uptober’ uptrend stays alive as buyers boldly buy the dip.”
Balanced Risks: While on-chain data shows whale accumulation supporting the bottom, experts warn of sensitivity to macro events like the upcoming US CPI report. Santiment analysts noted Bitcoin’s risk-asset behavior during tensions.
The event underscores the dangers of high leverage in perpetual futures, with centralized exchanges using auto-deleveraging to mitigate cascades.
Disclaimer: This article is for informational purposes only and does not constitute advice of any kind. Readers should conduct their own research before making any decisions.
