The cryptocurrency market plunged into disarray on Friday evening, erasing over $200 billion in total market capitalization as a staggering $9 billion in leveraged positions were liquidated in a flash crash ignited by President Donald Trump's aggressive announcement of 100% tariffs on Chinese imports and sweeping new export controls.
The move, which stoked fresh alarms over an escalating U.S.–China trade war, sent Bitcoin (BTC) spiraling more than 15% to a session low of $105,896, its sharpest drop since early 2025, before a tentative recovery lifted it back toward $113,600, leaving more than 1,514,388 traders nursing massive losses in one of the sector's most brutal unwinds.
What began as a late-session liquidity squeeze rapidly escalated into a full‑blown cascade after Trump's tariff declaration targeted critical Chinese rare earth exports, vital for global tech supply chains, colliding with overextended long positions and dwindling ETF inflows.
On‑chain analytics from Coinglass revealed the carnage's scale, with the platform logging the single largest wipeout, a $87.53 million BTC‑USDT order, amid a frenzy that briefly overwhelmed tracking systems and echoed the chaos of the 2020 COVID crash.
The 24‑hour liquidation tally, predominantly longs at over 90%, underscored the market's vulnerability to macroeconomic jolts, as Bitcoin's dominance surged while capital stampeded toward safer havens.
The rout inflicted disproportionate pain on altcoins, amplifying Bitcoin's downside in a classic risk‑off flight. Ethereum (ETH), often viewed as a high‑beta bellwether, led the blue‑chip implosion with an intraday plunge of up to 18% before settling around a 12% daily loss, as DeFi protocols saw volumes evaporate overnight.
Solana (SOL) wasn't far behind, cratering 22% in the melee, while XRP tumbled a steep 25% on whispers of regulatory ripple effects from the trade spat.
Among large‑cap standouts, Dogecoin (DOGE) endured the harshest blow, slashing 39% to scrape $0.09 lows amid retail panic selling, though its meme‑driven faithful swiftly rallied around historical October rebound patterns that have delivered average gains exceeding 400% in past cycles.
This perfect storm of geopolitical saber‑rattling, weekend positioning woes, and forced deleveraging has traders on edge, with Bitcoin now testing $100,000 as a key support level ahead of potential weekend escalations.
"It's a textbook leverage purge," one prominent X analyst observed, highlighting how thin order books exacerbated the slide.
While the immediate dust is settling, ETH ETF inflows showed faint signs of rebounding, the episode lays bare crypto's deepening ties to global trade frictions, even as institutional adoption accelerates.