- The cryptocurrency market suffered what has been described as “the 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.”
A promising “Uptober” rally collapsed catastrophically on Friday after a geopolitical bombshell from the White House sent waves of fear through global markets, triggering a cascade of liquidations that erased nearly $20 billion from the digital-asset space in a single trading day.
The carnage was swift and merciless. During a harrowing seven-hour stretch, Bitcoin plunged from the relative safety of $121,000 to a grim low near $109,000.
The pain extended across the market: Ethereum fell to $3,686 and Solana dipped just above $173.
But the larger narrative centered on leveraged positions that were systematically wiped out.
The volatile session produced a “flash liquidation crash,” wiping out nearly $7 billion across markets in a single hour, including $5.5 billion from long positions, Sean Dawson, head of research at Dervie, told Decrypt.
When the dust settled, the bulk of the day’s nearly $20 billion in liquidations — a staggering $16.7 billion — came from long positions, according to CoinGlass data.
The presidential spark: a tariff threat triggers the storm
This was not a crypto-only crisis; it was contagion from fear rippling outward from the highest office in the United States.
Crypto and traditional markets sold off after President Trump stunned markets by canceling a planned meeting with Chinese President Xi Jinping and ordering a “massive increase” in tariffs on Chinese imports.
The threat — which Trump himself acknowledged could be “potentially painful” for Americans — immediately pushed risk assets lower.
Tech-heavy Nasdaq plunged 3.6%, the S&P 500 fell 2.7%, and the Dow Jones dropped 1.9%, signaling that markets read the president’s comments as the start of a more aggressive phase in the trade war.
The aftermath: a classic relief rally
As quickly as the storm hit, a fragile calm began to return.
Over the weekend, China appeared to soften its stance, and a panic-stricken market started to recalibrate. Analysts suggested the brutal sell-off may have been an intense but short-lived geopolitical overreaction.
Today, a powerful rebound is underway. “What we’re seeing is a classic relief rally,” said Dean Serroni, CEO of crypto investment manager Merkle Tree Capital, to Decrypt.
The recovery came as fast as the crash. Bitcoin jumped about 5% on the day to reclaim the $115,100 level.
Ethereum led the charge, surging roughly 10.5% to $4,138, while major altcoins such as Solana, BNB and Dogecoin posted double-digit gains.
Serroni described the strong bounce as “pure short-covering and a re-entry after the market overreacted to Trump’s tariff bombshell.”
He highlighted the light selling pressure and a dramatic reset of open interest in derivatives markets, indicating the carnage was largely a technical event — a violent purge of overleveraged derivatives traders rather than a fundamental, long-term shift in market outlook.
His final assessment summed up a wild, historic week: “This rout was a geopolitical reflex, not a structural break.”