Key Takeaways
Why did crypto markets crash?
Trump’s warning about China’s export controls and possible tariff hikes reignited trade war fears.
How severe was the fallout?
Over $700 million in crypto positions were liquidated within hours, led by Bitcoin and Ethereum as funding rates turned defensive.
Crypto markets reeled on Friday, 10 October, after U.S. President Donald Trump accused China of issuing hostile letters to several nations. The letter, according to Trump, threatened new export controls on rare earth materials, a move that he said could “clog markets” worldwide.
A sudden shock from Trump’s post
In a lengthy post on Truth Social, Trump warned that the U.S. would respond with “massive tariff increases” and “financial countermeasures,” The message rattled global markets and sent risk assets tumbling within hours.
The post immediately revived memories of the “Liberation Day” tariff war earlier this year, when Trump imposed sweeping tariffs.
That move triggered a rapid escalation, with Beijing retaliating with tariffs as high as 34%, and later tightening exports of rare earths critical to global supply chains.
Friday’s remarks signaled that the conflict may be reigniting. Trump said the U.S. could introduce “massive tariff increases” and other countermeasures, echoing the April escalation that rattled markets across Asia and the U.S.
$700 million in liquidations rock the market
Data from Coinglass showed over $700 million in crypto liquidations in the past 24 hours. Long positions bore the brunt of the losses, totaling $609 million, as Bitcoin and Ethereum led the declines.
Source: Coinglass
Bitcoin briefly dipped below $119,000, losing nearly 3% on the day, while Ethereum dropped 5.8% to around $4,100. Funding rates tightened across major exchanges, indicating traders were scaling back leverage amid the uncertainty.
Source: TradingView
Bitcoin’s RSI hovered near 52, signaling fading bullish momentum after failing to sustain above the $123,000 resistance level. Ethereum’s RSI fell to 41, reflecting stronger downside pressure as selling volume intensified.
Why Trump’s post hit crypto
Trump’s statement reignited fears of a renewed U.S.–China trade war, which has historically fueled global risk aversion. His reference to “monopoly positions” and “financial countermeasures” suggested further disruptions to supply chains and inflation-sensitive industries.
Risk assets, including crypto, moved sharply lower in response. The rapid cascade of liquidations showed that leveraged traders were caught off guard by the abrupt shift in tone from Washington.
What’s next
With Beijing yet to respond officially, traders are bracing for further volatility through the weekend. If China issues a counterstatement or the U.S. formalizes new tariff measures, crypto markets could see additional downside pressure.
Bitcoin’s next major support lies near $115,000, with resistance at $123,000. Ethereum’s key support is around $4,000, while overhead resistance remains near $4,400.
