Trump's 100% tariff on China triggers the largest liquidation in history! $9.55 billion evaporated overnight.

Trump's imposition of a 100% tariff on China shocked the global market, with the crypto assets liquidation amount reaching an unprecedented 9.55 billion dollars, and over 1.5 million traders suffered Get Liquidated. Bitcoin fell from 122,000 dollars to 102,000 dollars, and Ether plummeted, with the total market capitalization evaporating by 9% to 3.8 trillion dollars.

Unprecedented Crypto Assets Liquidation Disaster: $9.55 Billion Vaporized Overnight

(Source: Coinglass)

The past 24 hours have witnessed what may be the most severe liquidation event in the history of the crypto assets market. According to real-time data from CoinGlass, as of the publication of this article, approximately $9.55 billion worth of open contracts were liquidated, affecting over 1.5 million crypto asset traders. This figure not only sets a new record in absolute terms but also involves an astonishing number of traders. The trigger point for this crypto asset liquidation storm was President Trump’s retaliatory tariff policy against China and the ensuing global market panic.

From the perspective of the liquidation structure, this disaster clearly shows the characteristics of a bull slaughter. Among the total liquidation amount of 9.55 billion dollars, 8 billion dollars was from long positions, while short positions only accounted for 1.55 billion dollars. This stark ratio reflects the mainstream sentiment in the market before the news of Trump imposing a 100% tariff on China: most leveraged traders held bullish positions, betting that crypto assets prices would continue to rise. However, the sudden arrival of this geopolitical black swan event instantly turned these optimistic expectations into bubbles, and all long positions were ruthlessly liquidated during the price big dump.

The two highest market capitalization blockchains—Bitcoin and Ethereum—unexpectedly faced the largest scale of crypto asset liquidation. The liquidation amount for Bitcoin reached 1.37 billion USD, followed closely by Ethereum at 1.26 billion USD, totaling over 2.6 billion USD, accounting for about 27% of the total liquidation amount. This ratio is actually lower than their share in the overall market capitalization, which may indicate that altcoins have been using leverage more aggressively and thus suffered relatively more severe impacts during the big dump.

The most striking single liquidation occurred on a CEX exchange, where a BTC/USDT leveraged position was liquidated for an amount as high as 87.53 million USD. This massive liquidation shows that even well-capitalized large traders are difficult to escape from extreme market volatility. Even more concerning is that such large liquidations themselves can exacerbate market volatility, as the forced sell orders generated during the liquidation process further depress prices and trigger more liquidations, forming a so-called "liquidation spiral."

Due to many Crypto Assets data sources not retaining complete historical records, it is somewhat difficult to place this event in a historical context. However, based on available data, the last major long liquidation event for Bitcoin occurred on September 24, when approximately 285 million USD worth of BTC longs were liquidated, which was the largest single-day loss since February this year. In contrast, the scale of this liquidation of 1.37 billion USD in BTC is nearly 5 times the September event, enough to demonstrate its historical significance.

At least one market observer stated on social media that Friday's big dump could be the "largest liquidation event" in the history of crypto assets, at least in terms of US dollars. Although larger percentage falls have occurred during the early days of Bitcoin, the absolute liquidation amounts were far less than this due to the smaller market size at that time. This time, the $9.55 billion in crypto asset liquidations might really be the largest single-day wealth destruction event in the history of the crypto asset market.

Trump imposes 100% tariffs on China: Rare earth war ignites market panic

To understand the cause of this epic crypto assets liquidation, one must trace back to Trump's decision-making process of imposing a 100% tariff on China. On Thursday, the Chinese Ministry of Commerce announced a new export control policy: foreign entities exporting Chinese products containing more than 0.1% rare earth elements need to obtain a license. This seemingly technical trade policy is, in fact, a heavy blow, as China controls about 70% of the global rare earth production and 90% of the processing capacity, with rare earth elements being key materials for electric vehicles, semiconductors, defense systems, and renewable energy technologies.

Trump issued a fierce response statement through Truth Social on Thursday, accusing China of trying to "capture" other countries through rare earth monopolies, and announced a shocking global decision: the United States will impose a 100% tariff on all Chinese imports. This is not a symbolic small adjustment, but a declaration of a full trade war. A 100% tariff means that the cost of Chinese goods will double directly, which will have a ripple effect on global supply chains, consumer prices, and economic growth.

After the news that Trump imposed a 100% tariff on China came out, the global financial market immediately fell into panic mode. The US stock market fell sharply, with the S&P 500 index dropping more than 2%, and the Nasdaq index plummeting by 2.7%, making technology stocks a hard-hit area. European and Asian markets also fell simultaneously, with global risk assets facing indiscriminate selling. As an extreme manifestation of risk appetite, the reaction of the crypto assets market was even more intense.

The price of Bitcoin began a big dump from over $122,000 on Friday morning, dropping to around $113,600 in just a few hours, erasing all gains since August. Even more alarming was the further fall on Friday night, when the price of Bitcoin briefly fell below $102,000, setting a 24-hour low record. From peak to trough, the fall reached about 16%, a level of daily volatility that is rare even in the notoriously volatile Crypto Assets market. Ethereum and other major coins were not spared, with altcoins generally seeing declines exceeding 20%.

The total market capitalization of Crypto Assets fell by more than 9% in a single day, shrinking from about 4.2 trillion USD to 3.8 trillion USD, evaporating over 400 billion USD. The speed and scale of this wealth destruction are shocking, and it highlights the high correlation between the Crypto Assets market and macroeconomic and geopolitical risks. Bitcoin, once regarded as a "safe-haven asset" or "insurance against fiat currency depreciation," behaves more like high-risk tech stocks or commodity futures during actual crises, falling in tandem with traditional risk assets.

A more dramatic development is the rapid change in Trump's diplomatic stance. He initially announced the cancellation of a meeting with Chinese President Xi Jinping, which sent a serious signal to the market about the deterioration of U.S.-China relations. However, the president later indicated that he was still willing to meet with Xi Jinping, and if China changes its stance before November 1, he might cancel the tariffs. This rapid flip-flopping of policy has left the market even more confused and uneasy, making it difficult for investors to determine whether they should prepare for a long-term trade war or if this is just another pressure tactic before negotiations.

Mysterious whale shorts profit 190 million USD: Who is making a killing in the disaster?

In this epic crypto liquidation disaster, the vast majority of traders suffered heavy losses, but at least one highly watched derivatives trader not only survived but achieved astonishing profits. According to on-chain data tracking, a "whale" trader on the Hyperliquid platform profited around 190 million USD by shorting Bitcoin and Ethereum during this big dump. This number accounts for about 2% of the total crypto assets liquidation amount, demonstrating that a very small number of traders who correctly judged the market direction could reap astronomical profits amid the disaster of the majority.

The cryptocurrency trader @mlmabc, who has been tracking the movements of this whale, commented on X: "This is just public on Hyperliquid, imagine what he did on centralized exchanges or elsewhere. I'm sure this person played a significant role in what happened today." This comment raises an interesting yet unsettling question: was this whale simply engaging in predictive trading, or did his short-selling actions themselves exacerbate the market's big dump?

In the crypto assets market, the establishment and closing of large short positions can have a significant impact on prices. When a whale with hundreds of millions of dollars starts to short heavily, other market participants may take notice of this trend and follow suit, creating a herd effect. More directly, when large short positions are closed, it requires buying a corresponding amount of assets, and this buying pressure can temporarily support or push up prices; conversely, if certain strategies (such as spot selling for hedging) are used when establishing short positions, it may directly increase selling pressure.

The success of this mysterious whale also reveals the importance of information and timing. To establish a short position before the news of Trump imposing a 100% tariff on China was released requires keen insight into geopolitical developments, or at least a quick reaction. If this whale established a short position immediately after Trump's statement was released, then he must have had extremely fast decision-making and execution speed. If the layout was already in place before the news was released, it may be based on a judgment about the trends in US-China relations, or less likely but still possible, that some kind of advance information was obtained.

Regardless, this case once again demonstrates the brutal nature of the zero-sum game in the Crypto Assets market. The whale's $190 million profit directly comes from the losses of those traders holding long positions. In the $800 million long liquidations, while it cannot be said that all of this $190 million came from the liquidated traders (since the whale's counterparties may be traders who actively closed positions or hedged), the end result is that wealth is transferred from the longs to the shorts, from the majority to a very few.

For ordinary investors, this case offers several lessons. First, using high leverage in a highly uncertain macro environment is extremely dangerous, as geopolitical events can trigger severe fluctuations without any warning. Second, there are always some market participants who have faster information acquisition capabilities, stronger analytical abilities, or greater risk tolerance, putting retail investors at a natural disadvantage when competing against them. Third, profiting in extreme market events often requires counterintuitive decisions: shorting when everyone is optimistic and buying when panic peaks, which demands strong discipline and emotional control.

Bitcoin fell from 122,000 to 102,000: Technical analysis completely collapsed

The recent big dump of Bitcoin triggered by Trump imposing a 100% tariff on China not only reflects a drastic fluctuation in price digits but also represents a complete collapse of several key technical support levels. Bitcoin started to fall from a high of 122,000 USD on Friday morning, first breaking below the 118,000 USD short-term support, which had provided effective support several times over the past few weeks. When this level was lost, stop-loss orders from technical traders began to be triggered, exacerbating the downward pressure.

Subsequently, Bitcoin continued to drop to around $113,600, breaking below the key 50-day moving average identified by many technical analysts. The loss of the moving average is often seen as a signal of weakening medium-term trends, which further exacerbated market panic. More long positions were liquidated in this process, and the forced selling generated by the liquidations further drove down prices, creating a vicious cycle.

The most severe phase occurred on Friday evening, when the price of Bitcoin briefly fell below $102,000, setting a 24-hour low record. This price level means that Bitcoin has dropped below the important psychological barrier of $100,000, which is significant in both technical analysis and market psychology. Round numbers often become the focus of market participants' attention and important support/resistance levels. Falling below $100,000 not only triggered more technical sell-offs but also severely undermined investor confidence.

From a high of $122,000 to a low of $102,000, the decline reached approximately 16%. Although this fluctuation is not the largest in Bitcoin's history, considering it occurred in such a short period (less than 24 hours) and the current market capitalization of Bitcoin, the absolute destructive power of this big dump is unprecedented. Reports indicate that this drop "erased all gains since August," meaning that the upward trend of more than two months was completely reversed in a single day.

Technical analysts point out that after Bitcoin fell below $100,000, the next key support level may be in the range of $95,000 to $98,000. If this level is also breached, it could open up further downside, with target levels potentially dropping to $90,000 or even lower. However, some analysts believe that the psychological barrier of $100,000 may attract significant buying interest, especially from long-term investors who are waiting to enter at lower levels. Whether the market can stabilize at this point will determine if this big dump is a short-term panic adjustment or the beginning of a deeper bear market.

The Future Evolution of the Tariff Crisis: Will the Crypto Assets Liquidation Continue?

Trump's policy of imposing a 100% tariff on China has been announced, but its final implementation and impact remain full of variables. After his initial tough statement, Trump signaled a willingness to negotiate, indicating that he might cancel the tariff increase if China changes its position before November 1. This date gives both sides about three weeks of bargaining time, during which any new statements, negotiation progress, or policy adjustments could trigger significant market fluctuations.

For the cryptocurrency market, this policy uncertainty means that high volatility may persist in the coming weeks. If the U.S. and China reach some sort of compromise and the tariff threats are lifted, the market could rebound quickly, just as panic comes quickly and leaves quickly. Those traders who were liquidated in the panic will miss the rebound, while investors who bravely bought the dip may reap substantial rewards. Conversely, if negotiations break down and tariffs are indeed implemented on November 1, or even escalate further, then the current price may not be the bottom, and cryptocurrency liquidations could see a second or even third wave.

From a longer-term perspective, Trump's imposition of 100% tariffs on China and China's rare earth controls highlight the major trend of the end of globalization and the intensification of geopolitical divisions. In this environment, supply chain security, resource autonomy, and economic decoupling will become dominant issues. For crypto assets, which are global and decentralized, the impact of this trend is complex. On one hand, economic uncertainty and distrust of traditional financial systems may drive more people to seek cryptocurrencies as an alternative; on the other hand, global economic slowdown and reduced risk appetite may decrease demand for high-volatility assets.

Investors should adopt a more cautious and flexible strategy in the current environment. Avoiding excessive leverage is the primary principle, as the unpredictability of geopolitical events means that any position may face severe fluctuations in a short period. Maintain sufficient cash reserves or stablecoin holdings to be able to buy the dip during extreme market panic. Diversify investments rather than concentrating bets on a single asset, as different assets may perform very differently in the same event. Most importantly, set strict stop-loss points and execute them resolutely, avoiding the gambler's mentality of "waiting for a rebound" or "averaging down," as these strategies often lead to greater losses in extreme markets.