Bitcoin experienced a sharp pullback on Thursday, dropping below $108,000 as over $1.1 billion in crypto futures liquidations swept through the market. The sudden decline followed disappointing outcomes from President Trump’s meeting with Chinese President Xi Jinping and fresh signals from the Federal Reserve regarding potential interest rate cuts. Major cryptocurrencies, including Ethereum, Solana, XRP, and DOGE, all traded lower, with Ethereum down 5% to just above $3,782 and altcoins taking an even harder hit during the sell-off.
The leading digital asset had surged to a record high of $126,080 earlier in October, a month observers dubbed “Uptober” for historically strong gains across crypto and traditional markets. Bitcoin’s current drop represents a nearly 15% decline from that peak, signaling renewed volatility after a period of exuberant buying. The market’s reaction reflects broader investor sensitivity to both geopolitical and monetary policy developments.
Data from the crypto futures market reveals that long positions bore the brunt of the liquidations, with Bitcoin alone accounting for nearly $500 million and Ethereum contributing more than $250 million to the total. Analysts explain that traders had positioned aggressively for continued upside, only to encounter mixed signals from key events. Federal Reserve Chair Jerome Powell’s comments on Wednesday indicated that further rate cuts this year are not guaranteed, contradicting market expectations for continued monetary easing. Crypto markets, historically responsive to low-interest-rate environments, quickly adjusted to this more cautious outlook.
Strahinja Savic, head of data and analytics at FRNT Financial, observed that the market had anticipated a green light to take on more risk, but Powell’s cautious stance and the lack of concrete results from the Trump-Xi meeting led to rapid position adjustments. Greg Magadini, Director of Derivatives at Amberdata, echoed this sentiment, noting that the market had been heavily long ahead of the events and needed to recalibrate after the mixed news.
President Trump’s trade policies have long introduced volatility into both traditional and crypto markets. While his administration has at times embraced digital assets, tariff announcements and trade tensions have repeatedly triggered abrupt market reactions. Despite a recent 10% tariff reduction on China, markets remained unimpressed, reflecting continued investor skepticism about geopolitical certainty. U.S. stock indices also traded lower Thursday morning, reinforcing the broader risk-off sentiment.
From a market perspective, the current sell-off underscores the heightened sensitivity of crypto assets to both macroeconomic signals and geopolitical developments. While Bitcoin and leading altcoins have proven resilient over time, the events of Thursday highlight the potential for swift liquidity events when expectations for policy or trade outcomes are unmet. Looking ahead, traders and investors will closely monitor Federal Reserve signals, ongoing trade negotiations, and broader macro trends to gauge the next directional moves in the crypto market.
This episode serves as a reminder that even record-breaking rallies can face rapid corrections, and maintaining a balanced view of risk remains essential for both new and experienced participants in the crypto space.
