Crypto Crash After Tariff Announcement
The cryptocurrency market was hit by a wave of panic selling on Friday after US President Donald Trump announced a new 100 percent tariff on Chinese goods and imposed export controls on software. The move triggered a global market reaction, sending shock waves across equities, commodities, and especially digital assets.
Bitcoin, which had just reached an all-time high of over 125,000 dollars earlier in the week, plunged more than 12 percent to trade below 113,000 dollars by Saturday morning. The drop wiped out billions in leveraged trading positions and triggered widespread forced liquidations across exchanges.
According to data from Coinglass, over 19 billion dollars worth of crypto positions were wiped out in the last 24 hours, with 7 billion dollars of that occurring within a single hour on Friday. More than 1.6 million traders were liquidated during the crash, making it one of the largest liquidation events in the history of the crypto market.
A Historic Liquidation Wave
Market data platforms described the event as “the largest liquidation in crypto history,” as thousands of traders lost their positions simultaneously due to cascading margin calls. Binance, the world’s largest exchange, was reportedly processing liquidation orders continuously, with only one liquidation update per second being reported publicly.
Analysts now worry about broader market contagion and counterparty exposure. Brian Strugats, head trader at Multicoin Capital, said total liquidations could be even higher, estimating the number to potentially exceed 30 billion dollars once all data is reconciled.
“The focus now shifts to whether leveraged positions across institutions and hedge funds will cause ripple effects across the financial system,” Strugats added.
Key Support Levels for Bitcoin
The next critical support zone for Bitcoin now stands near 100,000 dollars, according to Caroline Mauron, co-founder of Orbit Markets. She noted that a sustained break below this level could mark the end of the ongoing three-year bull cycle.
Bitcoin’s options data also reflects this nervous sentiment. The highest number of put, or sell, options are concentrated at strike prices of 110,000 and 100,000 dollars, suggesting traders are preparing for further downside.
Mauron emphasized that “a fall below the 100,000 mark could shift sentiment completely and force long-term holders to reassess risk exposure.”
Global Market Impact
Trump’s announcement reignited fears of a renewed trade war between the United States and China, leading to a broad selloff across global markets. Stocks, oil, and crypto all declined sharply, while investors sought safety in US Treasuries and gold.
“A renewed trade conflict between the US and China created uncertainty across markets and led to a flight from risk assets,” said Ravi Doshi, co-head of markets at FalconX. “We saw an extraordinary demand for downside protection on our derivatives desk during the crash.”
Institutional traders, many of whom had leveraged positions in perpetual futures, were among the hardest hit. These contracts, which have no expiration, allow traders to maintain leveraged positions indefinitely but are vulnerable to sudden price drops.
Experts Call It a Black Swan Event
David Jeong, CEO of the algorithmic trading platform Tread.fi, described the crash as a “black swan event” for crypto markets. “Many institutions did not anticipate this level of volatility, and given the design of perpetual futures, even experienced traders faced liquidation,” he said.
Vincent Liu, chief investment officer at Kronos Research, added that while the selloff began due to US-China tensions, it was intensified by excessive institutional leverage. “This shows how deeply crypto markets are tied to global macro factors,” Liu said. “Volatility will remain high, but once leveraged positions are cleared, we may see a rebound.”
The Road Ahead
For now, all eyes are on the 100,000-dollar support level. A sustained recovery above 110,000 could help restore confidence, while a dip below 100,000 may push Bitcoin into a deeper consolidation phase.
The coming days will determine whether this is a temporary panic or the start of a longer bearish trend.
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