- The crypto market experienced what analysts described as the largest single-day wipeout in its history.
- Nearly $20 billion in liquidations were recorded on Friday alone.
- The sell-off was triggered by President Trump’s new tariff threats against China.
It was a brutal, historic sell-off — a sudden purge that one analyst called “the largest single-day wipeout in crypto history.”
A promising “Uptober” rally came to an abrupt halt on Friday after a geopolitical shock from the White House rattled global markets, sparking a cascade of liquidations that erased nearly $20 billion from the digital asset space in a single day.
The decline was rapid and severe. Over a harrowing seven-hour stretch, Bitcoin fell from about $121,000 to roughly $109,000.
The pain spread across the market, with Ethereum dipping to $3,686 and Solana sliding to just above $173.
But the real damage hit leveraged positions. The volatile session produced what has been described as a “flash crash of liquidations,” wiping out almost $7 billion across all markets within a single hour, with approximately $5.5 billion of that coming from long positions, Sean Dawson, head of research at Dervie, told Decrypt.
By the end of the day, most of the nearly $20 billion in liquidations—about $16.7 billion—had come from longs, according to CoinGlass data.
The presidential spark: A tariff threat ignites a firestorm
This was not a crypto-only event; it was a contagion of fear that rippled through both digital and traditional markets, prompted by a statement from the U.S. presidency.
The sell-off followed President Trump’s announcement that he was canceling a planned meeting with Chinese President Xi Jinping and had ordered a “massive increase” in tariffs on Chinese imports.
The threat, which the president acknowledged could be “potentially painful” for Americans, sent risk assets sharply lower.
The tech-heavy Nasdaq fell 3.6 percent, the S&P 500 dropped 2.7 percent, and the Dow declined 1.9 percent, signaling that investors interpreted the announcement as a step toward a more aggressive phase in the trade conflict.
The aftermath: A textbook relief rally
Just as swiftly as panic set in, a tentative calm began to return.
By the weekend, reports indicated China had softened its stance, and a market that had been seized by fear began to recalibrate. Analysts suggested the violent rout may have been a short-lived geopolitical overreaction rather than the start of a sustained downturn.
Now a notable rebound has taken hold. “What we’re seeing is a textbook relief rally,” Dean Serroni, CEO of crypto investment manager Merkle Tree Capital, told Decrypt.
The recovery has been fast. Bitcoin climbed roughly 5% on the day to reclaim the $115,100 area.
Ethereum led gains with about a 10.5% rise to $4,138, while major altcoins such as Solana, BNB, and Dogecoin posted double-digit rebounds.
Serroni described the bounce as largely driven by short-covering and mean reversion after the market overreacted to the tariff announcement. He pointed to thin selling pressure and a sharp reset in open interest across derivatives markets, indicating the losses were primarily a technical event — a forced deleveraging of overleveraged derivatives traders — rather than a fundamental change to the market’s long-term outlook.
His summary of a tumultuous week was direct: “This rout was a geopolitical knee-jerk, not a structural break.”