Tariff Shock Erases $1 Trillion in Three-Hour Cascade

Bitcoin crashed from above $122,000 to briefly below $102,000, wiping out all gains since August, while Ethereum tumbled from $4,783 to $3,400 before recovering.

The global crypto market cap fell over 9% in 24 hours to $3.8 trillion, with approximately $1 trillion erased in just three hours.

More than $7 billion in positions were liquidated in less than one hour of trading on Friday alone.

Long positions absorbed the bulk of damage, totaling $16.83 billion in losses compared to $2.49 billion from shorts. 

Bitcoin led liquidations at $5.38 billion, followed by Ethereum at $4.43 billion, Solana at $2.01 billion, and XRP at $708 million.

Hyperliquid saw the largest single liquidation, an ETH-USDT position worth $203.36 million.

The exchange handled $10.3 billion or roughly 53% of all liquidations, followed by Bybit with $4.65 billion, Binance at $2.39 billion, and OKX at $1.21 billion.

The collapse dwarfed previous record events, including the March 2020 COVID crash that saw $1.2 billion in liquidations and the November 2022 FTX collapse with $1.6 billion.

Friday’s event was approximately 20 times larger than the COVID crash, with Brian Strugats of Multicoin Capital noting the focus now turns to “counterparty exposure and whether this triggers broader market contagion.”

October’s Historical Strength Faces Unprecedented Test

Yesterday, Economist Timothy Peterson noted that drops of more than 5% in October are “exceedingly rare,” occurring only four times in the past decade during October 2017, 2018, 2019, and 2021.

Following each previous drop, Bitcoin rebounded by 16% in 2017, 4% in 2018, and 21% in 2019, with only

If history repeats and Bitcoin mirrors its strongest October rebound of 21% from 2019, a similar move from Friday’s $102,000 low would place the cryptocurrency around $124,000 within a week.

However, Trump’s tariff announcement scheduled for November 1 in response to Beijing’s export restrictions on rare earth elements creates ongoing policy uncertainty.

The president later hinted he could reverse tariffs if China changes course before the deadline, potentially triggering a short-term market recovery, though liquidation losses remain locked in.

According to Bloomberg, Caroline Mauron, co-founder of Orbit Markets, identified $100,000 as Bitcoin’s next major support level, below which “would signal the end of past three-year bull cycle.”

Bitcoin options markets reflected this view with the highest number of put strikes at $110,000 and the next highest at $100,000, according to Deribit data.