Trump Tariff Threat Sparks Crypto Flash Crash, Bitcoin Dips Below $110K

Late Friday evening, a Truth Social post revealed President Trump’s intention to impose a 100% tariff on Chinese imports, triggering an abrupt risk-off reaction across crypto markets. Bitcoin plunged below $110 000 as automated trading systems initiated over $7 billion in rapid liquidations, reflecting intense exposure to macro headlines.

Ether, XRP and Solana suffered outsized declines, each tumbling more than 15% during the initial shock. Algorithmic liquidation engines targeted leveraged long positions, creating a feedback loop that amplified price swings until key volatility filters were engaged by exchanges.

Trading volumes soared by 90% as participants moved to reduce exposure, with bid-ask spreads widening significantly on major venues. Institutional desks reported difficulty in sourcing counterparty liquidity, prompting temporary throttling of order flow to manage risk.

Support levels near $108 000 attracted relief buying from algorithmic market makers, who gradually replenished bids as volatility metrics normalized. Bitcoin’s partial recovery to $112 000 by Asian morning hours demonstrated the tentative nature of the rebound amid ongoing uncertainty.

Market watchers will focus on volatility indices and funding rate metrics to evaluate the durability of current price levels. Renewed trade tension rhetoric remains a key swing factor, capable of triggering further dislocations or validating a stabilization if tensions cool.