Bitcoin and other major cryptocurrencies started the week on a high note, recovering from a massive sell-off that triggered the largest wave of liquidations in crypto history. The downturn wasn’t caused by issues within the crypto space but by rising geopolitical tensions between the United States and China.

Bitcoin and Ethereum bounce back

Bitcoin traded at $114,738 early Monday, up 3% from the previous day, after briefly falling below $105,000 on Friday. Ethereum, the world’s second-largest cryptocurrency, jumped 8.5% to $4,132 after dropping to around $3,500 over the weekend.

The biggest wave of forced liquidations in crypto history

Data from Coinglass shows that over 1.6 million traders were liquidated on Friday, with total losses exceeding $19.1 billion. “The sell-off was triggered by macroeconomic news — events outside the crypto ecosystem,” explained Rick Maeda from Presto Research.

What exactly happened

China announced new export restrictions on rare metals vital for producing chips and batteries. Soon after, the U.S. responded by imposing 100% tariffs on Chinese tech products, sparking panic across global markets.

The crash came during a period of low weekend liquidity, intensifying forced liquidations among leveraged traders and accelerating the sell-off. Maeda said the market later rebounded “mechanically,” as excessive leverage was flushed out and traders regained confidence.

“Uptober” continues

Despite the turmoil, October remains a strong month for crypto markets. “Liquidity is returning, and panic is turning into risk appetite,” said Vincent Liu from Kronos Research. Investors are “buying the dip” and closely monitoring tariffs, the U.S. dollar, and market signals.

According to Nassar Achkar from CoinW, the upcoming U.S. inflation data (CPI) and Federal Reserve meeting will be key drivers. Nick Ruck from LVRG Research added that major investors have started buying Ethereum, a positive sign suggesting market recovery.

U.S.–China tensions ease

Over the weekend, both nations signaled willingness to resume trade talks. China stated it is ready to “strengthen dialogue” and may reconsider export license restrictions on rare metals.
On Friday, Donald Trump had sharply criticized China and announced new tariffs, triggering the crypto crash. However, by Sunday he softened his tone — a move analysts see as a sign of de-escalation.

Crypto market regains strength

“The scale of liquidations was unprecedented and will leave a mark,” Maeda noted. “Traders will now be more sensitive to macroeconomic developments.” In the coming days, the market’s direction will depend on global politics, economic data, and investor sentiment. If tensions continue to ease, the current rebound could gain momentum.

Sources:

https://www.theblock.co/post/374302/bitcoin-ethereum-rebound-following-massive-wipeout

https://www.mofcom.gov.cn/syxwfb/art/2025/art_58689dc0cfd74a8eb9c470e277060ed9.html

https://truthsocial.com/@realDonaldTrump/posts/115362196088273474

https://cointelegraph.com/news/crypto-com-ceo-regulatory-probe-exchanges-20b-liquidations

https://truthsocial.com/@realDonaldTrump/posts/115350455734003647

https://cointelegraph.com/news/us-china-soften-trade-rhetoric-market-rebound