Crypto markets violently crash after Trump's latest tariffs. Image courtesy of Shutterstock
The global crypto market plunged into turmoil on Friday after U.S. President Donald Trump announced sweeping new tariffs on China, sparking a violent sell-off that wiped out billions in minutes.
Within an hour of the announcement, over $7.5 billion in leveraged positions were liquidated, marking one of the most brutal crashes in months. Bitcoin, the market bellwether, briefly tumbled to $105,000 before rebounding above $114,000 in a dramatic recovery that stunned traders worldwide.
A Sudden Crash Sends Shockwaves
According to data from major tracking platforms, $6.2 billion in long positions and $1.3 billion in short positions were wiped out in the initial wave. The sell-off intensified overnight, bringing total liquidations to more than $9 billion in 24 hours.
Bitcoin alone saw $1.83 billion in leveraged trades erased, followed by Ethereum with $1.68 billion, Solana with $614 million, and XRP with $432 million. The largest single liquidation, worth $87.5 million, occurred on the HTX exchange’s BTC/USDT pair.
The collapse dragged the total crypto market capitalization down nearly 13% in a single day, now hovering around $3.59 trillion — the sharpest one-day decline since early April.
Trump’s Tariff Bombshell
The chaos began shortly after Trump’s post on Truth Social, where he announced a 100% tariff on all Chinese imports, set to take effect on or before November 1. He said the move was in response to China’s “aggressive trade stance” and new export controls on rare earth minerals.
“Ultimately, though potentially painful, it will be a very good thing for the U.S.A.,” Trump wrote, suggesting that short-term market turbulence was a necessary price for long-term strength.
The president also hinted at canceling his planned meeting with Chinese President Xi Jinping during the upcoming APEC summit in South Korea, further unsettling investors.
Panic and a Rapid Rebound
The sudden announcement triggered a wave of automated sell orders, sending Bitcoin into a steep free fall. Within minutes, prices plunged to $105,000, briefly erasing weeks of gains. However, strong institutional buying and algorithmic trading quickly stabilized the market, lifting Bitcoin back above $114,000.
Analysts noted that technical support levels between $105,000 and $107,000 helped cushion the fall. Once the price entered that range, automated buy orders and spot market demand kicked in, fueling the rapid rebound.
Still, experts caution that volatility remains dangerously high. “The market needs to hold above $110,000 to avoid another cascade of liquidations,” one analyst warned. “A drop below the $100K mark could trigger renewed panic selling.”
Signs of Cooling Momentum
Despite the rebound, key technical indicators suggest that Bitcoin’s recent rally may be losing steam. The Relative Strength Index (RSI) has fallen to the mid-40s, signaling the asset’s exit from overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator has turned negative — a classic warning of weakening bullish momentum.
Bitcoin’s market capitalization now stands at around $2.1 trillion, with trading volume spiking above $99 billion as panic-driven trades flooded exchanges. Ethereum, meanwhile, has dropped over 10% in the past 24 hours, while XRP has fallen more than 17%.
The Worst Sell-Off in Months
With over 1.4 million traders forced to liquidate positions in less than a day, this latest market rout ranks among the most severe since the spring correction. The scale of the wipeout highlights how sensitive digital assets remain to global political and economic shocks.
Though the broader market has since steadied, analysts warn that the aftershocks could linger. The combination of geopolitical tension and over-leveraged trading continues to make cryptocurrencies vulnerable to sudden, large swings.
For now, Bitcoin’s quick rebound offers a glimmer of resilience — but the shadow of Trump’s tariff war has reminded investors how fragile the crypto bull run can be.
