Bitcoin found its footing on Monday, climbing back above $114,000. This follows a truly wild week for the crypto market, which saw it reel from historic liquidations. The market is showing clear signs of bouncing back.
Last Friday was a day for the history books, though not in a good way. The cryptocurrency derivatives market got slammed, leading to a massive $19.3 billion in losses. To break that down, about $16.8 billion came from “long” bets, meaning people betting prices would rise, and another $2.5 billion from “short” bets, or those expecting prices to fall. It was the biggest single-day liquidation event in crypto history, leaving many investors stunned.
The market crash hit Bitcoin hard. In just a few hours, its price dropped by roughly $17,000, sinking below $105,000. This happened shortly after Bitcoin had hit a new record high of over $126,000 earlier in the week. The total value of all cryptocurrencies in the market shrank by 9% in a day, falling below $3.8 trillion.
Trump’s Tariff Threat Ignites Market Panic
What kicked off this whole mess? It was a statement from former President Donald Trump. He threatened a 100% tariff on goods imported from China. This sparked fears of a full-blown trade war. Investors quickly sold off risky assets, and cryptocurrencies, which often follow bigger economic trends, felt the pain.
During the market’s frenzy, some centralized exchanges struggled. Users of Binance, for example, reported problems with their stop-loss orders, withdrawals, and even account balances. Ethena’s stablecoin, USDe, even temporarily lost its peg on Binance, dropping to 65 cents. Binance later apologized for the trouble and said it would pay out $283 million in compensation to those affected.
The founder of Hyperliquid raised questions about how transparent centralized exchanges really are. He suggested that the true scale of liquidations might be even bigger than reported. This is because data from some platforms, like Binance, isn’t always complete. On Hyperliquid alone, over 6,300 wallets faced liquidation. This happened due to an automatic system that closes profitable positions to cover wider losses when insurance funds run out. It turned a market correction into a deeper structural event.
The good news is that some of the tension has started to ease. China’s Ministry of Commerce clarified that its rare earth export controls weren’t a total ban. Then, Trump posted on social media, saying, “The United States wants to help China, not harm it.” These messages helped calm the markets, leading to a bounce back.
Bitcoin Rises, Altcoins Follow
Crypto traders are finally catching their breath after Friday’s wild ride. Early on Monday, Bitcoin briefly jumped over 3%, topping $115,700, before settling a bit. Other cryptocurrencies, known as altcoins, also started to recover. Cardano (ADA) and Chainlink (LINK) initially led the charge, seeing gains of almost 10% in 24 hours. They have since settled to more modest increases.
According to data from CoinGecko, most major cryptocurrencies are up over the last 24 hours. Ethereum (ETH) has risen 1.8% to $4,145. XRP is up 3.8% to $2.59. Solana (SOL) trades 2% higher at $199. ADA and LINK have seen their gains adjust to less than 4%, trading at $0.71 and $19.6, respectively. A few, like BNB and Tron (TRX), are down slightly, around 0.5%.
The total market value of all cryptocurrencies has now climbed back above $4 trillion, up 1%. The total amount of liquidations has also slowed down dramatically, falling below $500 million in the past 24 hours. Coinglass data shows $250 million in long positions and $230.4 million in short positions liquidated since yesterday. This affected about 198,222 individual traders. Ethereum saw the most liquidations, totaling $144 million, followed by Bitcoin at $84.6 million.
Market Reset for a New Rally?
Justin d’Anethan, who works at Arctic Digital, called the event a “massive emotional reset.” He noted that the extreme volatility punished traders going both ways. “Traders were hit hard during the drop and again on the quick rebound. But the long-term structure remains solid,” he told CoinDesk.
The crash, which erased $500 billion from the market, serves as a stark warning about the dangers of too much borrowed money. Excessive leverage magnified both gains and losses. This “reset” has cleaned out speculative positions. This might lay a stronger foundation for steady growth, as long as geopolitical tensions don’t get worse, a point highlighted by The Block.
Jeff Mei, COO of BTSE, believes the market will recover if the US-China trade dispute doesn’t get out of hand. “If the dispute between the U.S. and China doesn’t turn into a full-scale trade war, the market will likely bounce back and push towards new record highs,” he commented.
Beyond the trade tensions, traders are still watching the US Federal Reserve closely. Before Trump’s tariff announcement, the central bank’s upcoming interest rate decision was a big focus. If the Federal Reserve cuts rates this month, cryptocurrencies like Bitcoin could jump back into a strong upward trend. However, investors remain cautious, preparing for any new corrections.
As this article goes to press, Bitcoin’s price sits at $114,650. That’s a strong 84.5% gain over the last year. However, it’s still down almost 9% from its all-time high of $126,080, which it hit on October 6.