Global cryptocurrency markets suffered their steepest fall of the year after former US President Donald Trump announced a 100% tariff on Chinese goods and “critical software.” The unexpected declaration sparked widespread panic among traders, resulting in one of the largest liquidation events in digital asset history.
Record Liquidations and Market Panic
According to a Bloomberg report citing Coinglass data, over $19 billion in leveraged crypto positions were wiped out within 24 hours. More than 1.6 million traders faced forced liquidations as markets reacted violently to growing fears of a renewed trade war.
In just the first hour of trading on 10 October, over $7 billion in positions vanished, setting an unprecedented liquidation record. Brian Strugats, head trader at Multicoin Capital, warned that total market damage could exceed $30 billion as risk contagion spreads through both centralised exchanges and DeFi platforms.
Bitcoin and Ethereum Lead the Plunge
Bitcoin fell more than 8% to $111,542 by midday on 11 October, slashing its market capitalisation to $2.22 trillion. Despite the sharp fall, Bitcoin trading volume surged by 145% to $183.88 billion as investors rushed to exit high-risk bets.
Ethereum experienced even deeper losses, dropping 12.7% to $3,778 with trading volumes rising 148% to $112.75 billion. CoinMarketCap reported that overall crypto market value fell from $4.30 trillion to $3.74 trillion in a single day, erasing approximately $560 billion.
Bitcoin dominance currently stands at 59.8% with Ethereum at 12.2% and other tokens making up 27.9%. Major altcoins mirrored the turmoil. Binance Coin fell 6.6%, XRP plunged over 22% while Tether held steady near $1 as traders sought refuge in stable assets.
Experts Call It a Correction, Not a Collapse
Despite the dramatic sell-off, some market analysts urged calm. Edul Patel, CEO of Mudrex, described the movement as a correction rather than a structural failure.
“The market is reacting strongly to Trump’s tariff announcement, yet similar October corrections between 2017 and 2020 were followed by relief rallies of up to 21%. Bitcoin briefly tested the $102,000 range before recovering,” Patel noted.
He added that with expectations surrounding upcoming spot altcoin ETFs in the US, long-term sentiment remains cautiously optimistic. “This environment presents an entry opportunity for strategic investors, particularly in fundamentally strong assets like Bitcoin and Ethereum.”
Tariff Shock and Geopolitical Fallout
Trump’s announcement on Truth Social outlined plans to impose a 100% tariff on all Chinese goods from 1 November 2025. He justified the move by accusing China of preparing “sweeping export controls” on rare earth materials critical to global technology and electric vehicle industries.
“China has taken an extraordinarily aggressive position on trade. The US will respond with equivalent measures,” Trump declared.
The proposal stunned financial markets already under strain from inflation worries and uncertain interest rate trajectories. Fears of a renewed global trade war amplified volatility across risk assets, with cryptocurrencies absorbing the initial shock.
Outlook: Volatility Set to Continue
While short-term conditions remain turbulent, many analysts believe this phase reflects fear-driven liquidation rather than a shift into long-term decline. With high trading volumes and continued institutional interest, a stabilisation phase may follow once macroeconomic tensions ease.
For now, traders are preparing for heightened volatility as geopolitical headlines dominate sentiment. The combination of aggressive trade policy, inflation pressures and speculative excess has created a perfect storm in crypto markets, with more turbulence expected in the weeks ahead.
