- The crypto market suffered record $19 billion liquidations after Trump’s tariff announcement on Chinese imports.
- Over 1.6 million traders were liquidated as Bitcoin and Ethereum dropped sharply.
- Diplomatic talks between the US and China restored market confidence.
A decline in the global crypto market on Friday, October 10, initiated investor panic and historic losses. Market volatility was driven by the statement of new 100% tariffs on Chinese imports by US President. The dip resulted in over $19 billion in crypto liquidations within 24 hours, marking the largest liquidation event in crypto history.
Tariff Announcement Sends Shockwaves Through Crypto Markets
On Friday last week, President Trump reported a 100% tariff on all Chinese imports in response to China’s rare earth export policy. The news immediately influenced the crypto market, with Bitcoin dropping 10% in just 30 minutes. Ethereum declined over 12%, falling below $3,500. Altcoins such as Solana, Hyperliquid, and Sui recorded more losses. The total crypto market capitalization dropped from $4 trillion to $3.7 trillion within hours.
The crash caused a wave of forced liquidations as heavily leveraged positions were closed. Over 1.6 million traders were liquidated during the sell-off. This exceeded previous liquidation records by almost ten times, marking a new high in market losses. Leverage magnified the damage, intensifying the crash across all major crypto assets.
US – China Relations Shift Over the Weekend
By Sunday, there was a change of tone between Washington and Beijing, and it indicated a potential end to the trade standoff. The Chinese Ministry of Commerce issued a statement that it was ready to intensify trade dialogue. Chinese authorities said they would consider changing their rare earth export policies, including the possibility of license exemptions to ease trade. These developments were directed to an opening for negotiations.
On the same day, President Trump issued a statement referencing Chinese President Xi Jinping, downplaying tensions. He wrote that President Xi “doesn’t want depression for his country,” and stated, “The USA wants to help China, not hurt it.” This softer stance contrasted with his earlier remarks that ruled out a meeting with Xi at the APEC summit in Seoul.
Markets React to Softened Rhetoric
After the tone changed, market conditions started to recover during the weekend. Bitcoin has recovered more than 12 percent after reaching its lows and rebounded to trade above 114000. The trust crept back, and Ethereum surpassed the mark of $4,100 . Analysts noted that the market was still very responsive to utterances by political leaders.
Jeff Park of Bitwise said that a Trump-Xi meeting at the upcoming APEC summit should go ahead. Although there is still some uncertainty, the decrease in the aggressive language has given a short-term relief to investors. However, both sides can sustain the diplomatic momentum and the markets may stabilize.
