Cryptocurrency Bitcoin Today: Price Slides After Tariff Shock as Record Liquidations Rock the Market

Bitcoin’s Sharp Drop and Why It Happened

The catalyst was macro, not crypto-native. A surprise push for steep U.S. tariffs on Chinese imports ignited broad risk-off moves, spilled into digital assets, and accelerated as derivatives markets unwound. Once spot prices broke key thresholds, cascading liquidations hit perpetuals venues at scale. At the lows, BTC briefly traded near ~$104k before stabilizing, while major altcoins fell harder as liquidity thinned and bids vanished across order books.

Leverage Flush: How Big Was the Damage?

By every metric, the shakeout was historic. Roughly tens of billions of dollars in crypto positions were liquidated within a single day, with the vast majority on the long side. One prominent on-chain derivatives venue saw thousands of wallets wiped in the rout, underscoring how concentrated leverage had become after weeks of “Uptober” optimism. Open interest collapsed, funding flipped, and implied volatility spiked—classic signs of a market violently repricing risk.

Key stress points traders flagged:

• Open interest reset: A rapid drop that cleared crowded long positioning.

• Perp premiums flipped to discounts: Signaling de-risking and spot-led price discovery.

• Liquidity gaps: Wider spreads and slippage amplified intraday moves, especially in altcoins.

ETFs and Flows: A Mixed Picture Beneath the Headlines

Spot Bitcoin ETFs had logged strong net inflows in recent sessions, but Friday’s macro shock overwhelmed that support, at least in the short run. Flow data show notable divergence among funds: a handful continued to attract capital even as price fell, while others cooled. The takeaway for now: institutional demand remains present but not omnipotent—fast, policy-driven shocks can overpower steady inflows when leverage is stretched.

Levels That Matter: What to Watch Next

• $111k–$110k support: A widely watched zone where dip buyers first reappeared; a clean break risks momentum toward prior congestion bands.

• $116k–$118k resistance: The first real test for any bounce; reclaiming it would suggest the liquidation phase is maturing.

• Funding and basis: Sustained neutral or negative funding would indicate leverage discipline returning after the flush.

• Liquidity depth: Improving top-of-book size on major venues would reduce whipsaw risk and stabilize price action.

Strategy Lens: Caution with a Bias for Mean Reversion

For short-term traders, this is a tape that rewards patience. Deleveraging shocks often produce two-way volatility as market makers rebuild inventory and late bears chase breakdowns into illiquid hours. The higher-probability setups tend to emerge once funding normalizes and spot leads again. For longer-horizon investors, the structural bull case—scarce digital collateral, ongoing ETF adoption, and macro hedging demand—remains intact, but entries are best scaled and risk-managed while policy uncertainty lingers.

The Bigger Picture: Macro Still Drives the Narrative

Bitcoin’s reaction underscores a simple reality: in 2025, crypto trades inside the global macro machine. Tariff threats, dollar swings, and equity volatility now flow through to BTC more directly than ever, partly because traditional investors can express views via regulated spot ETFs. Until the policy path clarifies and liquidity fully resets, expect elevated volatility—and a market that punishes complacency on both sides of the trade.