TLDR
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Bitcoin lost over $19B in leveraged trades, $9.4B in just one day.
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New US tariffs on China triggered a 13% Bitcoin drop to $107,000.
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Retail investors bought $1.1B in Bitcoin during the market drawdown.
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Over 172 public companies still hold Bitcoin despite recent volatility.
Bitcoin is facing another sharp correction, repeating a pattern last seen earlier this year. Renewed U.S.–China trade tensions have sparked a selloff across crypto markets. As Bitcoin struggles to hold key support levels, traders are now watching for signs of extended volatility. The correction began after a series of U.S. policy announcements triggered sudden price drops, liquidations, and wider market stress.
Tariffs and export controls trigger crypto selloff
The crypto market began October on a positive note, with Bitcoin rising nearly 18% and touching new highs above $126,000. However, the mood shifted quickly after U.S. President Donald Trump announced new 100% tariffs on Chinese goods and strict export controls on software tied to artificial intelligence and semiconductors.
The reaction was fast. Within days, Bitcoin dropped over 13%, falling to the low $107,000s. More than $19 billion in leveraged positions were liquidated, with $9.4 billion cleared in just 24 hours. This marked one of the sharpest intraday drawdowns of the year, catching many short-term traders off guard.
Liquidity tightens as volatility spreads
As Bitcoin prices dropped, liquidity across crypto exchanges also weakened. This made price discovery more difficult and added pressure to smaller tokens. Altcoin markets became unstable, with spreads widening and slippage increasing across most trading pairs.
The collapse of the USDE stablecoin during this period exposed growing ties between stablecoin liquidity and broader market stability. As liquidity dried up, more forced sales and liquidations followed. This created a feedback loop, pushing prices lower and increasing fear across the market.
Institutional selling meets retail buying
Institutional investors began reducing risk exposure across digital assets. ETF outflows picked up in the days following the trade announcements. Some portfolios shifted towards cash or lower-beta assets. Still, Bitcoin holdings by public companies remained stable. Over 172 firms continue to list Bitcoin on their balance sheets, according to recent filings.
At the same time, retail investors added over $1.1 billion into spot Bitcoin markets during the decline. Exchange data shows rising buying volume from small and medium accounts. This trend reflects continued interest in long-term holding, even as short-term volatility remains high.
Market outlook remains tied to global policy
Analysts at Ecoinometrics note that the current correction shares similarities with the March–May drawdown, which lasted nearly three months. That decline also began with geopolitical stress and took weeks for risk appetite to return.
Bitcoin is now testing support at $107,000. If trade tensions continue, the correction may last into November. Much will depend on policy developments in Washington and Beijing. Any signs of easing tariffs or talks between the two nations could help stabilize risk markets, including crypto.
