Over the past week Bitcoin and other major cryptocurrencies plunged sharply, snapping back from their early-October highs. The trigger was a sudden geopolitical shock: on Oct. 10 U.S. President Donald Trump announced 100% tariffs on Chinese imports and new export controls on technology. This unexpected move spooked global markets. According to reports, it "triggered the largest crypto liquidation in history, with over $19 billion worth of leveraged positions erased in just 24 hours". Bitcoin led the losses, sliding over 12% from its record-high (~$125K) to below $113K. Trading was highly volatile: Bitcoin briefly dipped as low as ~$105K before recovering to around $112K. Other major tokens were hit even harder – Ethereum fell roughly 15–20%, while altcoins like Solana and XRP tumbled 20–30% in the sell-off.
- Liquidations: The crash forced an enormous amount of forced selling. Over $7–$19 billion of long positions were liquidated within 24 hours. Coinglass data (cited by The Economic Times) put the figure at ~$19B, affecting about 1.6 million traders. Bitcoin alone saw an estimated $5.34B in liquidated longs and Ethereum about $4.39B.
- Price Moves: Bitcoin (BTC) plunged more than 10%, briefly falling from ~$117K to under $110K. Ethereum (ETH) dropped ~16% below $3,700. Notable altcoins were hit hard: for example, Solana (SOL) and Dogecoin (DOGE) saw intraday falls exceeding 30–50%. Binance Coin and XRP also fell roughly 10–15% or more, signaling broad market stress.
- Correlation with Stocks: This was not a crypto-specific issue. U.S. equities sold off sharply on the same news: on Oct. 10 the Dow fell ~1.9%, the S&P 500 ~2.7%, and Nasdaq ~3.6%. The S&P and Nasdaq recorded their biggest one-day percentage losses since April. Traders noted a "sell first, ask questions later" panic driven by trade-war fears, which cascaded into crypto as investors fled risky assets.
Fed Policy and Safe-Havens
In the days before the crash, macroeconomic factors had been bullish for crypto. Fed minutes released on Oct. 8 confirmed that policymakers expect to cut interest rates further this year, a dovish signal that buoyed risk assets. Traders were pricing in about a 90% chance of an October rate cut and another in December. This pivot toward easier policy – alongside a weakening U.S. dollar – helped fuel a rally in both crypto and gold earlier in the week. For example, gold soared above $4,000/oz, its first time ever, as investors piled into safe-havens amid uncertainty. Indeed, analysts noted gold had become one of 2025's best-performing assets, outpacing equities and Bitcoin.
However, the trade-war shock quickly reversed risk sentiment. With U.S.–China tensions spiking, investors fled not just crypto but equities and oil as well. The yield on bonds and the CBOE Volatility Index spiked. In this environment, Bitcoin acted less like a "digital gold" and more like a risky asset – tumbling with stocks. Some traders pointed out that the brief safe-haven bids (in gold and bitcoin) were overwhelmed by the shock.
ETF Inflows and Institutional Appetite
Leading into October, institutional demand had been extremely strong. In the week ended Oct. 4, crypto exchange-traded funds (ETFs) saw a record $5.95 billion of inflows globally. Notably, U.S. bitcoin ETFs attracted about $3.55B of that, while Ether ETFs saw ~$1.48B. Bloomberg and Glassnode data confirm this was one of the largest ETF inflow waves since April 2025. These inflows helped push Bitcoin to all-time highs – for example, Reuters reported BTC briefly topping $126,200 on Oct. 6 (reuters.com).
On-chain analytics echoed the institutional bid. Glassnode reported that roughly $2.2 billion flowed into U.S. spot bitcoin ETFs in a single week (around Oct. 8), reversing earlier modest outflows. It also noted that mid-sized holders (wallets with 10–1,000 BTC) were steadily accumulating, while some large whales took profits. Around the Oct. 5 peak, about 97% of Bitcoin's supply was in profit – a typical late-cycle signal but one still without obvious exhaustion. In short, fundamentals had been strong: liquid flows into ETFs and broad on-chain buying were driving the bull run.
On-Chain Signals & Market Structure
Blockchain data shows that, prior to the crash, traders were largely shifting Bitcoin off exchanges, a bullish sign. Messari noted that Bitcoin's on-exchange supply was near a five-year low (messari.io), reflecting holders moving coins to cold wallets or long-term storage. Key on-chain indicators pointed to a mature bull cycle: for example, Glassnode highlighted that about 190,000 BTC had last traded in the $117–$120K zone. This suggests the market built a support base there, which traders will now watch closely as Bitcoin retraces.
However, leverage was also elevated. Glassnode warned that futures open interest and funding rates had jumped sharply – annualized funding exceeded 8% (coindesk.com) – implying many traders were highly long. In the crash, those leveraged longs were aggressively liquidated, amplifying the sell-off. Chart-based signals turned deeply oversold: for instance, Bitcoin's 24-hour RSI plunged (CoinDesk data noted), echoing stress levels similar to past flash crashes. But notably, long-term holders largely rode out the fall; metrics like MVRV (market cap vs realized cap) remained healthy compared to 2017's final blow-off top.
Altcoins and Wider Crypto Trends
The downturn was felt across the crypto market. After the tariff news, tokens tied to decentralized finance and Layer-1 projects plunged. Solana (SOL) lost over 30% and briefly tested support near $160. XRP, Dogecoin and others gave up 20–30% of their value. Analysts attributed this to a combination of fear-driven selling and forced liquidations in high-leverage markets.
Interestingly, some mid-cap projects showed resilience. Binance Coin (BNB) fell only about 10% from its peak, aided by recent momentum (some reports noted BNB trading around $1,130 even as others tumbled). Memecoins and smaller tokens saw even larger swings: many dropped 40–50% intraday before partial recoveries. This differential highlights that Bitcoin (the market leader) still exerts a stabilizing influence, even as the broader crypto total market cap briefly gave back significant gains.
What Traders Should Watch
In sum, the last week's crash was primarily driven by macro shocks, not crypto-specific fundamentals. Geopolitical turbulence abruptly reset risk appetites. From a trader's perspective, the key takeaways are:
- Support Levels: Bitcoin is now testing former breakout zones. On-chain data suggests the $110K–$120K band is critical (where heavy trading occurred in early October). If BTC holds above its 200-day moving average (around $107K) – as some models indicate – the broader bull trend may still be intact.
- Funding and Leverage: Watch funding rates and futures open interest. With so much leverage flushed out, markets may stabilize, but any renewed squeeze could cause sharp moves. Traders should be cautious with margin.
- ETF Flow Signs: Institutional flows remain a major driver. Even as Bitcoin prices sold off on Friday, U.S. spot ETFs showed only modest net outflows (CoinShares data suggests Bitcoin ETFs gave up a few million, while Ether funds saw larger redemptions). Renewed inflows could quickly anchor a bottom, as prior weeks' demand was a floor under prices.
- Macro Events: Further developments in U.S.–China trade policy will likely dominate near-term price action. Likewise, U.S. interest-rate decisions (with a Fed meeting looming end of October) remain crucial. Crypto traders should monitor these events as closely as any on-chain metric.
Bottom line: The flash crash underscores that crypto markets are still deeply tied to global liquidity and policy news. While on-chain indicators show broad HODL accumulation and strong institutional backstop (via ETFs), sudden macro shocks can rapidly reverse sentiment. Traders will now be looking to see if Bitcoin can reclaim $120K once the turmoil eases, or if deeper corrections to $110K (or lower) materialize first. The focus should be on managing leverage, watching ETF flows, and staying aware of the trade-war headlines – as these factors have proven decisive in the recent crash.
Sources: Crypto market data and analysis from Reuters, Economic Times, CoinDesk and CryptoSlate were used to compile this report:
economictimes.indiatimes.com, reuters.com, coindesk.com, tradingview.com, cryptoslate.com. These include official news reports, on-chain research, and market analytics.
Why did Bitcoin crash this week?
Bitcoin dropped sharply after the U.S. announced new 100% tariffs on Chinese imports. This triggered panic in global markets, causing investors to sell off risky assets — including crypto. Heavy liquidations from over-leveraged traders made the fall worse.
How much did Bitcoin fall?
Bitcoin fell around 12% in a single day, sliding from about $125,000 to below $110,000. At one point, it briefly touched the $105K zone before recovering slightly.
Was the crypto crash only because of the U.S.–China trade news?
That was the main trigger, but it wasn't the only factor. The market was already overheated with high leverage and extreme optimism. When global sentiment flipped, those leveraged positions were liquidated fast, deepening the crash.
How much crypto was liquidated during the crash?
Over $19 billion in leveraged positions were liquidated in just 24 hours — the largest wipeout in crypto history. Bitcoin accounted for about $5.3B of that, and Ethereum around $4.3B.
Did ETFs have any impact on the crash?
Indirectly, yes. Before the crash, Bitcoin ETFs had seen record inflows (about $6B in one week). That pushed prices up fast. When the sell-off began, some traders took profits and reduced exposure, slowing ETF inflows temporarily.
How did Ethereum and other altcoins perform?
Ethereum fell about 15–20%, while altcoins like Solana, XRP, and Dogecoin dropped 20–40%. Smaller tokens with less liquidity were hit hardest because traders rushed to exit riskier positions first.
Are there on-chain signs of a deeper bear market?
Not yet. On-chain data still shows strong long-term holder accumulation and low Bitcoin supply on exchanges. Most selling came from short-term traders using high leverage, not long-term investors.
What macro factors should traders watch next?
Keep an eye on:U.S. Federal Reserve rate decisionsFurther U.S.–China trade developmentsETF inflow/outflow dataBond yields and global risk sentimentThese are currently driving crypto price direction more than on-chain metrics.