Bitcoin sinks below $104,000 amid historic crypto selloff and renewed global tensions.
Bitcoin’s sharp downturn continued this week as the cryptocurrency market endured one of its steepest declines of 2025. The move wiped out roughly six hundred billion dollars in total market value and shook investor confidence in digital assets long touted as “digital gold.”
3 Key Points
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Massive liquidation wave: Over nineteen billion dollars in leveraged positions erased in a single weekend.
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Macro risks resurface: US-China trade tensions trigger broad risk-off sentiment.
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Safe-haven doubts: Bitcoin fails to hold up as gold and silver hit new highs.
Bitcoin’s Historic Fall: What Happened?
Bitcoin (BTC) has fallen about 4% to around $103,550, marking its lowest level since June and extending a decline that began shortly after setting a record high of $126,000 on October 6.
The latest crash followed a string of leveraged liquidations that swept across crypto exchanges on October 10–11, when roughly $19 billion in positions were wiped out. Analysts called it the largest single-day liquidation event in the market’s history — nearly nine times the February 2025 crash and nineteen times the FTX collapse in 2022.
Ether (ETH), the second-largest cryptocurrency, fell more than 5% to below $3,700, extending a roughly 25% retreat from its August peak. Binance Coin (BNB) plunged as much as 11% after reports of user losses and technical glitches on the Binance exchange.
According to data from CoinGecko, the total market capitalization of digital assets has dropped by more than $600 billion since last Friday.
Why Did Bitcoin Crash So Hard?
US-China Trade Tensions
The market shock began when U.S. President Donald Trump announced a 100% tariff on Chinese imports, sparking retaliation from Beijing. The resulting risk aversion hit equities, commodities, and digital assets alike.
“Crypto acted like the canary in the coal mine,” said Matthew Hougan of Bitwise, noting that Bitcoin’s steep decline mirrored growing anxiety in global markets.
Liquidation Feedback Loop
As the selloff accelerated, billions of dollars in bullish bets were automatically liquidated. Ben Kurland, CEO of research platform DYOR, explained that once the first wave of liquidations started, “funding pressures turned it into a feedback loop,” creating a freefall across exchanges.
More than three billion dollars in long positions were liquidated early in the week, while put options — used as downside protection — surged on the derivatives platform Deribit, signaling that traders expect further declines.
Binance and Market Stress
BNB’s 11% drop also weighed on sentiment. Binance has reportedly offered $600 million in compensation to affected users following technical glitches during the October crash. The incident highlighted how infrastructure issues can magnify market losses during high-volatility periods.
How Are Investors Responding?
Exchange-traded funds (ETFs) tied to Bitcoin and Ether saw combined outflows of nearly six hundred million dollars on Thursday. Derivatives data also show increased hedging activity: the put-to-call ratio on Bitcoin options rose to 1.33, indicating more traders buying protection against further downside.
Despite the selloff, some analysts see the correction as a healthy reset. Paul Howard of B2 Ventures noted that “Bitcoin slipping under its 100-day moving average suggests the market is cooling off, not collapsing.”
Others believe institutional investors may be reallocating toward safer assets. Funds that once raised billions to buy Bitcoin for corporate balance sheets have slowed purchases sharply — down nearly 76% since mid-summer.
What It Means for Investors
Bitcoin’s drop below $104,000 underscores how sensitive crypto markets remain to leverage and macroeconomic shocks. Once seen as a hedge against inflation and instability, the world’s largest cryptocurrency is now behaving more like a high-risk asset tied to global sentiment.
Still, many experts view this downturn as part of a longer-term maturation process. Excess leverage has been flushed out, and major players like Kraken, Circle, and Ripple are pushing deeper into regulated finance — a sign that crypto is evolving toward stability rather than chaos.
Investors should expect continued volatility in the near term but remember that market resets often clear the path for more sustainable growth.
Conclusion
Bitcoin’s latest crash has erased hundreds of billions in market value, shaking confidence but also resetting risk across the crypto landscape. Whether it marks the start of a prolonged downturn or a temporary purge of excess speculation remains to be seen.
As one analyst put it, “Crypto is still young — every crash is a stress test of conviction.”
FAQs
Why did Bitcoin fall so sharply?
A combination of record liquidations, elevated leverage, US–China trade tensions, and exchange technical problems triggered a rapid selloff that pushed Bitcoin below key support levels.
How much value did the crypto market lose?
The total crypto market lost roughly six hundred billion dollars in value over the recent week of selling, according to market-aggregate data.
Are institutional buyers still supporting crypto prices?
Institutional and corporate buying slowed materially. Purchases by public digital-asset treasuries fell sharply from mid-summer levels, reducing a previously strong demand source.
What do derivatives markets indicate?
Derivatives show increased hedging and put buying, with the put-to-call ratio rising and dealers buying protection — a sign that traders expect continued volatility and are paying up for short-term downside insurance.
Should investors view this as a buying opportunity?
That depends on risk tolerance and time horizon. Some see this as a reset that could offer entry points. Others warn that volatility and macro uncertainty could keep prices under pressure. Diversification and position sizing are advisable.
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