Trump’s latest tariff imposed on China triggered a nearly $18 billion crypto sell-off. Image: Reuters
Global cryptocurrency markets staged a strong recovery on Monday after suffering one of their worst weekends of the year. The rebound followed reassuring comments from President Donald Trump and Vice President JD Vance, signaling possible progress in trade talks with China.
The total market capitalization of all cryptocurrencies surged more than 6%, crossing the $4 trillion mark, according to CoinGecko data. Bitcoin, the world’s largest digital asset, climbed back to around $115,000 in London trading after plunging below $105,000 on Friday. Ether also rebounded, rising to about $4,100 after dropping to under $3,500 over the weekend.
Trump’s Soothing Tone Lifts Market Sentiment
The recovery came after Trump and Vance hinted at a willingness to reach a trade deal with China. Their comments eased fears triggered by Friday’s announcement of new tariffs on Chinese goods. Those tariffs had caused a record $19 billion in crypto positions to be wiped out, sparking widespread panic selling.
“The rebound is driven by a conciliatory message from Trump,” said Richard Galvin, co-founder of hedge fund DACM. He added that while smaller tokens — or altcoins — have regained some ground, most remain well below their early-October levels. “Headline risk remains high,” Galvin cautioned, referring to potential volatility from ongoing trade developments.
A Weekend of Chaos for Traders
Friday’s sharp decline exposed how vulnerable the crypto market remains to sudden macroeconomic shocks. Automated liquidations, heavy leverage, and thin weekend liquidity amplified the selloff, forcing many traders out of their positions.
The turbulence caused disruptions across the industry. Ethena USDe, the third-largest stablecoin, briefly lost its dollar peg, while Binance — the world’s biggest crypto exchange — suffered temporary technical issues. More than 1.6 million traders were liquidated, data from Coinglass revealed.
Executives are still assessing the full damage. So far, there are no signs of a major institutional collapse similar to the 2022 implosion of FTX, which triggered a chain of bankruptcies. Still, investors remain on edge.
Signs of Stabilization Ahead
Funding rates — the cost traders pay to maintain leveraged positions — have dropped to their lowest levels since the FTX crisis. Analysts at Coinglass described this as one of the most significant “leverage resets” in crypto history.
Market maker Caladan noted that open interest in Bitcoin and Ether options has fallen by nearly half, to $33 billion and $19 billion respectively. Galvin believes this sharp reset could help stabilize pricing in the medium term, giving the market “a stronger foundation to build on.”
Bitcoin Holds Yearly Gains
Despite the recent turmoil, Bitcoin remains up about 23% in 2025. The rally has been largely supported by Trump’s pro-crypto stance, which has encouraged optimism among investors and businesses alike.
Just last week, Bitcoin hit an all-time high of $126,251 before the trade-related panic struck. With signs of easing tensions between Washington and Beijing, traders are cautiously optimistic that the worst of the volatility may have passed — at least for now.
