- The cryptocurrency market experienced its “largest one-day wipeout in crypto history.”
- Nearly $20 billion in liquidations were triggered on Friday alone.
- The crash was sparked by new tariff threats from President Trump against China.
It was a brutal, historic bloodbath — a sudden and violent purge that one analyst called “the largest one-day wipeout in crypto history.”
On Friday, a promising “Uptober” rally ended catastrophically when a geopolitical bombshell from the White House sent fear through global markets, triggering a cascade of liquidations that erased nearly $20 billion from the digital asset sector in a single day.
The carnage was swift and merciless. Over a harrowing seven-hour stretch, Bitcoin plunged from the relative safety of $121,000 to a low near $109,000.
The pain reverberated across the market, with Ethereum falling to $3,686 and Solana dipping just above $173.
But the real story was the leveraged positions that were systematically wiped out.
The volatile session produced a “liquidation flash crash,” wiping out almost $7 billion across markets in a single hour — roughly $5.5 billion of that from long bullish positions, according to Sean Dawson, head of research at Dervie, speaking to Decrypt.
When the dust settled, most of the nearly $20 billion in daily liquidations — a staggering $16.7 billion — came from longs, data from CoinGlass showed.
The presidential spark: tariff threat ignites a firestorm
This was not a crypto-specific crisis; it was a contagion of fear set off at the highest level of the U.S. government.
The sell-off across crypto and traditional markets followed President Trump’s dramatic announcement that he had canceled a scheduled meeting with Chinese President Xi Jinping and ordered a “massive increase” in tariffs on Chinese imports.
The threat, which Mr. Trump himself acknowledged could be “potentially painful” for Americans, immediately rattled risk assets.
The tech-heavy Nasdaq fell 3.6%, the S&P 500 dropped 2.7%, and the Dow declined 1.9%, signaling that traders interpreted the president’s words as a shift into a more aggressive phase of the trade war.
Aftermath: a textbook relief rally
But as quickly as the storm arrived, a fragile calm began to return.
Over the weekend, China appeared to soften its stance, and a panicked market started to recalibrate. Analysts suggested the brutal sell-off may have been a brief — albeit violent — overreaction to a geopolitical shock.
A powerful rebound is now underway. “What we are witnessing is a textbook relief rally,” Dean Serroni, CEO of crypto investment manager Merkle Tree Capital, told Decrypt.
The recovery has been as rapid as the crash. Bitcoin rose about 5% during the day to retake roughly $115,100.
Ethereum led the charge with an impressive 10.5% jump to $4,138, while major altcoins such as Solana, BNB, and Dogecoin posted double-digit gains.
Serroni explained the strong bounce as “pure short-covering and reversal after the market overreacted to Trump’s tariff bombshell.”
He pointed to the “thin” selling pressure and the dramatic reset in open interest across derivatives markets — signs the slaughter was primarily a technical event, a violent purging of “overleveraged derivatives traders” rather than a fundamental, long-term shift in market outlook.
His final assessment summed up a wild and historic week: “This wipeout was a geopolitical instinct, not a structural break.”