The cryptocurrency market was thrown into chaos on Friday as Bitcoin (BTC) tumbled by more than 10%, triggering over $7 billion in liquidations across major exchanges. The dramatic downturn followed U.S. President Donald Trump’s surprise announcement of a 100% additional tariff on Chinese goods, reigniting trade tensions between Washington and Beijing.
A Market Shock Fueled by Political Fire
Bitcoin, which had been trading near $117,000 earlier in the day, plunged to below $110,000 shortly after Trump’s announcement. The decline came as part of a broader sell-off across the crypto market. Ethereum (ETH) fell 16% to $3,700, while Solana (SOL), XRP, and Dogecoin (DOGE) saw losses of up to 30%.
According to data from CoinGlass, the flash crash liquidated more than $7 billion in leveraged positions, making it one of the largest single-day wipeouts in recent memory. The timing couldn’t have been worse — the markets were already jittery after Trump’s earlier remarks threatening new tariffs in response to China’s export controls on rare earth metals.
“Friday went from bad to worse,” said one analyst. “Once the 100% tariff news hit, panic took over and traders rushed to de-risk.”
Trump’s Tariff Announcement Triggers Panic
The catalyst came via a Truth Social post late Friday afternoon, where President Trump wrote:
“Also on November 1, we will impose export controls on any and all critical software.”
That statement sent shockwaves through both the traditional financial markets and the crypto space, causing Bitcoin to fall another $3,000 within minutes of the post going live.
The move is seen as a retaliatory response to China’s restrictions on rare earth exports, a critical component in semiconductor and tech manufacturing. Analysts believe this escalation could mark the most severe trade standoff since the 2018 U.S.-China tariff war, with cryptocurrency markets acting as collateral damage.
Altcoins Take a Brutal Hit
If Bitcoin’s fall was bad, the altcoin market was devastated. Tokens such as Cardano (ADA), Chainlink (LINK), and Aave (AAVE) experienced losses of between 35% and 40%. Traders on X (formerly Twitter) described the situation as “a full leverage reset” and compared it to the March 2020 COVID-19 crash that sent markets spiraling.
“Covid-level nukes,” wrote crypto trader Bob Loukas, describing the sudden cascade. “Nasty action, but also a great candidate for a shakeout before a potential recovery.”
Meanwhile, Zaheer Ebtikar, CIO of Split Capital, said the altcoin sector was “absolutely eviscerated.” He noted that altcoins are now trading at levels not seen in over a year, reflecting a total market dislocation.
Traders and Analysts Brace for More Volatility
Prominent trader Pentoshi echoed the sentiment, calling it one of the “top three flushes of all time.”
“There are a lot of people in incredible pain right now,” he said, hinting at the massive losses faced by retail and institutional traders alike.
Market observers argue that Trump’s tariff rhetoric added to an already “overbought” market condition, making a sharp correction inevitable. However, many analysts also view the sell-off as a potential reset for a healthier long-term trend.
“While painful, this shakeout may be necessary,” said Ram Ahluwalia, CEO of Lumida Wealth. “The fundamentals of Bitcoin remain strong, but macro politics are dictating short-term volatility.”
Comparison to the 2020 COVID Crash
Many in the crypto community likened the event to the March 2020 pandemic crash, where Bitcoin briefly fell below $4,000 before rebounding to historic highs months later.
This time, though, the circumstances are geopolitical — not pandemic-driven. Investors are now questioning whether Trump’s aggressive trade stance could lead to another wave of financial uncertainty similar to previous trade wars.
“This feels like March 2020 all over again — except this time it’s tariffs, not lockdowns,” said one trader on Reddit.
What’s Next for Bitcoin and the Market?
Despite the carnage, long-term holders remain cautiously optimistic. Historical data suggests that Bitcoin often bounces back stronger after large-scale liquidations. If market sentiment stabilizes and global tensions ease, analysts predict Bitcoin could recover to the $115K–$120K range within weeks.
However, uncertainty looms ahead of November 1, the date when Trump’s tariffs are set to take effect. Until then, traders expect heightened volatility and reduced liquidity, especially across Asian and U.S. trading sessions.
For investors, this serves as a critical reminder of how quickly external political events can ripple through decentralized markets.
Expert Takeaway
While the immediate future looks rocky, most experts believe the long-term narrative for Bitcoin remains intact. The crypto industry has weathered pandemics, regulations, and crashes before — and each time, it has come back stronger.
As one analyst summed it up:
“The market just needed to flush out leverage. Now comes the real test of conviction.”
🔗 High-Authority External Source:
For detailed liquidation data, refer to CoinGlass Market Dashboard.
✅ Key Takeaways
- Bitcoin fell 10%, dropping below $110,000 after Trump’s tariff threat.
- Over $7 billion in crypto positions were liquidated in 24 hours.
- Altcoins like ETH, SOL, XRP, ADA, and LINK plunged up to 40%.
- The crash mirrored the market panic of March 2020.
- Experts view this as a short-term shakeout, rather than a long-term collapse.
Final Thoughts
Friday’s crash proved once again that the crypto market is deeply intertwined with global politics. As trade wars intensify and volatility rises, investors are reminded that Bitcoin’s most significant risk isn’t always from within the blockchain — but from the world beyond it.
