The global cryptocurrency market endured one of its most dramatic routs in history as the Fear and Greed Index plummeted from 64 (Greed) to 27 (Fear) within a single day. This seismic shift in investor sentiment was triggered by President Donald Trump’s surprise announcement of a 100% tariff on Chinese imports, sending shockwaves through digital asset markets and sparking the largest documented liquidation event to date.

Unprecedented Liquidations: $1 Trillion Erased in Hours

Within three hours of the tariff announcement, the crypto market saw almost $1 trillion in value wiped out. According to data from CoinGlass and corroborated by major analytics firms, over 1.66 million traders were liquidated, with total reported losses exceeding $19.33 billion—with some estimates placing the figure closer to $30 billion, as exchange reporting lags may undercount true totals. Binance registered over 1 liquidation order per second at the peak.

• Bitcoin (BTC): Tumbled from over $122,000 to below $102,000 before a modest recovery, erasing gains accrued since August.
• Ethereum (ETH): Fell from near $4,800 to $3,400, subsequently stabilizing near $3,800.
• The global market capitalization dropped 9% in 24 hours, bottoming at $3.8 trillion.
• Long positions absorbed most losses, totaling $16.83 billion—shorts lost $2.49 billion.
• Major assets led liquidations: $5.38 billion in BTC, $4.43 billion in ETH, $2.01 billion in Solana, $708 million in XRP.
• Hyperliquid exchange processed the largest single liquidation order (ETH-USDT, $203.36 million) and accounted for 53% of all liquidations.

This event overshadowed flash points such as the March 2020 COVID-19 crash ($1.2 billion liquidated) and the FTX collapse of November 2022 ($1.6 billion liquidated)—Friday’s catastrophe was nearly 20 times larger than the COVID episode. As Brian Strugats of Multicoin Capital observed, the attention now shifts to “counterparty exposure and the risk of broader market contagion.”

Historical October Patterns Shattered

October has traditionally been a strong month for Bitcoin, ranking second-best in average monthly performance since 2013, with average returns of 20.10%, trailing only November (46.02%). However, such steep one-day drops in October are exceedingly rare—only four instances in the last decade have seen BTC drop over 5% in October, with rebounds following in most cases.

Economist Timothy Peterson notes that similar October plunges led to subsequent gains of 16% (2017), 4% (2018), and 21% (2019), while 2021 was an outlier, seeing an additional minor decline. Based on historical patterns, a robust recovery is possible, though far from guaranteed amidst current policy uncertainty and technical damage.

U.S.-China Tensions & Policy Overhang

The root of the turmoil can be traced to President Trump’s policy announcement aimed at responding to China’s export restrictions on rare earth elements. The announced 100% tariff, set for November 1, has injected considerable uncertainty, with the President later signaling potential reversals contingent on Chinese actions. The crypto market, deeply intertwined with macroeconomic currents, responded with a risk-off cascade in tandem with equity markets—the S&P 500 slid 2.7% on the news.

Technical Analysis: Is This the Bottom?

Technical analysts remain sharply divided:

• Bitcoin (BTC): Now trades near $111,500 after rebounding from $102,000. Immediate support lies at $110,000-$113,000, with $113,500 as a pivotal resistance-turned-support. Further upside would require a sustained break above $117,933 and $124,475; failure risks retests of $102,000 or deeper dives to $95,000-$100,000.
• Ethereum (ETH): Currently stabilized around $3,833 after recovering from a $3,400 floor. Key short-term resistance is at $4,000—success here could reignite upside momentum toward $4,200-$4,500; support rests at $3,600-$3,800.
• Clearing of excessive leverage via liquidations may have removed some selling pressure, but follow-through depends on fundamental and macro policy improvements.

Market volume did not signal overwhelming conviction in either direction post-crash, suggesting traders are still in wait-and-see mode.

Analyst Sentiment: Capitulation or Opportunity?

The analyst community is split. Samson Mow (Jan3 founder) remains bullish, highlighting “21 days left in Uptober,” while Michael van de Poppe (MN Trading Capital) argued the event marks “the bottom of the current cycle”—drawing parallels to the COVID-19 crash that marked the prior cyclical low. Others urge a longer-term perspective, with some suggesting future price volatility could make these swings look minor in hindsight.

David Jeong (Tread.fi CEO) called it a “black swan event,” emphasizing the lack of preparation for such volatility among institutions. Vincent Liu (Kronos Research) added that the selloff was “sparked by US-China tariff fears but fueled by institutional over-leverage,” noting the closer relationship between crypto and macro factors.

Market Sentiment: Extreme and Fastest Reversal on Record

The Fear and Greed Index reading of 27 represents one of the steepest sentiment shifts on record in crypto, down from 64 a day prior and 71 a week ago. Bitcoin touched a six-month low during the session—underscoring the degree of dislocation and panic.

Both Bitcoin and Ethereum face a period of high uncertainty. The removal of excessive leverage could open the door to stabilization, but any sustained recovery would require resolution of the current U.S.-China trade standoff and/or a strong technical reclaim of lost support zones.

What’s Next for Crypto Investors?

In the immediate aftermath, markets are likely to consolidate around new, lower levels as investors reassess both macro and market-specific risks. Technical levels will be closely watched, and sentiment will likely remain fragile until there is greater clarity on U.S. trade policy, leveraged exposure, and the health of market infrastructure.

The aftermath of this crash highlights the dual nature of the digital asset class: opportunity born of volatility, but risk amplified by speculation, leverage, and global macro policy shifts. Seasoned investors, as always, will be watching for signs that fear has reached a crescendo—a classic setup for future reversal.