Geopolitical flare-up and market reaction
An announcement of fresh 100% tariffs on Chinese imports and sweeping export controls on critical software reignited U.S.–China trade tensions. Bitcoin, which had rallied nearly 18% earlier in October, suffered a swift reversal and fell from highs above $126 000 to lows just above $107 000 within days. Over $19 billion in leveraged crypto positions was wiped out, with $9.4 billion liquidated in a single 24-hour period, echoing volatility seen in the March–May sell-off.
Liquidity stress and market mechanics
As volatility surged, liquidity fragmented across exchanges, amplifying price moves. The collapse of a major stablecoin and mass liquidations revealed structural vulnerabilities in a market now deeply interconnected with global macro risk. Perpetual futures funding rates flipped negative, and open interest plunged, signaling forced deleveraging rather than orderly exits.
Industry resilience and outlook
Despite the turbulence, institutional holders remained steadfast. Over 170 public companies continue to hold Bitcoin in their treasuries, and retail inflows into spot markets exceeded $1.1 billion during the drawdown. Analysts note that recovery will depend on renewed risk appetite and a gradual rebuild of liquidity rather than macro predictions. Market watchers now anticipate whether the October downturn will extend into November or if Bitcoin’s secular uptrend will resume as global tensions ease.
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