Last Friday, Bitcoin and the wider crypto market were hit by a major blow not seen in a long time. Within just a few hours, BTC plunged and dragged many altcoins down with it. Panic spread rapidly across the market. The cause did not come from within the crypto industry itself, but mainly from outside the sector: a message from Trump reignited the trade war between the United States and China.

US–China trade war puts pressure on the market

Donald Trump increased pressure on China with new threats of higher import tariffs. He announced that the US would introduce tariffs of 100% on all Chinese goods. These trade tensions created uncertainty across global financial markets – and Bitcoin reacted particularly sharply. 

Investors fled from risk assets, including crypto. The result was a steep, almost panic-driven crash. Within hours, multiple markets tumbled, including Wall Street, wiping more than $1.5 trillion in market value. According to CoinGlass, over $19 billion in positions were liquidated in total, marking the largest liquidation event in crypto history. Within a single hour, at 23:00 on 10 October, the six largest coins fell simultaneously. XRP lost nearly 37%, Dogecoin 31%, BNB 26%, Solana 19%, Ethereum 11% and Bitcoin only 4%.

Trump changes tone and calms the market

Donald Trump clearly saw the impact of his message reflected in the market. After the crash, he attempted to ease the situation. Through social media and interviews, he emphasised that talks with China were “constructive” and that both parties ultimately wanted to reach an agreement. He also hinted that there was room for flexibility in the trade strategy.

This softer tone was enough to calm markets somewhat. Several markets rebounded, and the crypto market also began to recover gradually. Bitcoin stabilised and even staged a clear comeback in the days that followed. Various altcoins followed the same pattern.

Current situation: tariffs still on the table

Although tensions have eased, the trade tariffs have not disappeared. The US still has additional levies on Chinese goods in sight, and China is considering countermeasures. There is cautious talk of new negotiation rounds, but no final deal has been reached. At the moment, the deadline stands at 1 November, which Trump says is still “a long way off”.

Markets are therefore caught between hope and fear: one strong statement could spark fresh turmoil, but positive news could instead fuel a rally.

Why is Bitcoin reacting so strongly?

Where BTC was once seen primarily as an independent ‘digital safe haven‘, it now appears more sensitive to macroeconomic developments. There are several reasons why BTC has become increasingly affected by geopolitics:

Institutional investors hold an ever-larger share of Bitcoin, causing it to behave more like traditional markets.

Liquidity and leverage make the market more volatile: negative news can lead to rapid, large-scale sell-offs.

The narrative is shifting: Bitcoin is viewed as digital gold, but in uncertain moments it sometimes behaves more like a high-risk investment asset.

Friday‘s crash showed that this tension still exists.

Bitcoin recovery and expectations

Following Trump‘s softer tone and signals that both the US and China want to avoid escalation, market sentiment has improved. Bitcoin has regained part of its losses. Altcoins are also recovering again. Some altcoins have even surged by double digits. BNB leads the way with a gain of 13.83%. In addition, Dogecoin has risen by 10.18% and Chainlink by 10.59%. Ethereum and Cardano are up 8.36% and 8.89% respectively, while Ripple and Solana have climbed 7.45% and 7.09%.

Analysts describe this as a “healthy correction” within a broader bullish trend. At present, the expectation is that as long as trade war rhetoric remains mild, BTC could continue to recover. If a positive trade agreement is reached, it could even trigger a new rally.

On the other hand, escalation or new tariffs could once again deliver a sharp blow. For now, investors seem to be catching their breath, but the market remains on high alert. Bitcoin has once again proven how deeply it is intertwined with global events — and how quickly it can turn when politics and economics collide. The coming weeks will therefore be crucial: if calm prevails, Bitcoin may continue to rise — but a single new tweet could reignite the fire.

Disclaimer: This is not financial advice. Always conduct your own research and consider seeking professional guidance before investing.