Crypto Flash Crash: BTC Drops Below $110K on Trump’s 100% China Tariff Shock, $19B Liquidation Cascade Slams ETH, SOL, XRP

According to @MI_Algos, the October 10 crypto flash crash saw BTC fall about 10%, while ETH and major altcoins like SOL, XRP, and LINK dropped 15–30%, with more than $19 billion in margin positions liquidated within 24 hours and BTC bottoming in the $104,000–$105,000 area; the author also notes an extreme outlier print in ATOM, underscoring the depth of the sell-off (source: @MI_Algos). Reuters, Barron's, Business Insider, and The Times of India reported that U.S. President Trump announced a 100% tariff on Chinese goods, pressuring risk assets broadly; @MI_Algos attributes the initial spark for the crypto sell-off to this tariff shock, which aligned crypto with equity risk-off flows (sources: Reuters; Barron's; Business Insider; The Times of India; @MI_Algos). According to @MI_Algos, market structure amplified the move via high leverage on longs, thin weekend liquidity, stop-loss clusters and algorithmic flows, plus rotation into perceived safer or higher-yield assets such as gold and stablecoins; key trading lessons include cutting leverage, waiting for breakout confirmation, respecting structural support with defined stops or hedges, scaling in gradually, and monitoring order-book liquidity heatmaps to avoid liquidity hunts during volatility (source: @MI_Algos).
SourceAnalysis
The recent cryptocurrency market crash on October 10, 2025, serves as a stark reminder of the volatility inherent in crypto trading, where altcoins faced annihilation and even blue-chip assets like Bitcoin and Ethereum got battered. According to trading analyst @MI_Algos, this event, triggered by U.S. President Trump's announcement of a 100% tariff on Chinese goods, led to Bitcoin plunging approximately 10%, dropping below $110,000 and bottoming out in the $104,000 to $105,000 range. Ethereum and other major altcoins, including SOL, XRP, LINK, and ATOM, experienced even steeper declines, with some dropping 15-30% and ATOM shockingly falling 99.98%. This flash crash resulted in over $19 billion in margin positions liquidated within 24 hours, marking one of the largest liquidation cascades in crypto history. Traders who were overleveraged found themselves caught in a self-reinforcing death spiral, as forced liquidations accelerated the downturn, highlighting the dangers of high-leverage positions without adequate buffers.
Key Causes Behind the Crypto Market Cascade
Diving deeper into the causes, the macro shock from geopolitical tensions acted as the initial catalyst, but structural issues amplified the damage. Overleverage was rampant, with many traders using 20x or higher leverage, leaving no room for even a 5% market move. Thin liquidity, especially near the weekend, made the market vulnerable, as large orders quickly eroded depth and triggered algorithmic reactions. Herd behavior and stop-loss clusters below key support levels fueled the cascade, with smart money potentially initiating liquidity hunts to shake out weak hands. Additionally, capital rotation from Bitcoin into perceived safer assets like gold or stablecoins contributed to the pressure. For traders, this underscores the importance of monitoring order book heatmaps and liquidity zones, as seen in tools that track flow divergence and absorption areas, to anticipate such moves.
Common Trading Mistakes and Lessons for Future Protection
Many affected traders fell into traps like entering positions without confirmation, chasing momentum into resistance, or lacking contingency plans. Ignoring structural support levels and trading based on hopes rather than order flow led to severe drawdowns. To grow from this, @MI_Algos emphasizes planning for black swan events by using position sizing, hedges, and partial exits, even in bull markets. Traders should focus on structure over narratives, scaling in gradually around high-volatility periods, and respecting macro triggers by reducing exposure. Post-mortem analysis of trades—reconstructing entries and identifying errors—is crucial for improvement. For instance, watching key support zones around $104,000 for Bitcoin could signal if deeper retests are imminent, potentially offering buying opportunities if they hold, or warning of further downside if breached.
In the absence of real-time market data at this moment, reflecting on this event's implications for ongoing trading strategies is essential. The crash correlated with broader risk asset sell-offs, suggesting traders monitor cross-market indicators like equity indices for early warnings. On-chain metrics, such as trading volumes spiking during the liquidation event, reached unprecedented levels, with Bitcoin's 24-hour volume surging amid the panic. This event highlights trading opportunities in volatility: short-term scalpers could have capitalized on the rebound from $105,000, while long-term holders might view dips as accumulation points. Support levels to watch include Bitcoin's 50-day moving average near $100,000, with resistance at $110,000. For altcoins like Ethereum, trading pairs against BTC showed relative weakness, dropping below 0.025 BTC/ETH, indicating potential rotation back to blue chips. Institutional flows, observed through whale wallets rotating capital, could signal recovery if inflows resume. Overall, this crash reinforces disciplined risk management—never bet the farm on unconfirmed breakouts, and always have exit strategies tied to liquidity clusters. By internalizing these lessons, traders can transform painful losses into stepping stones for smarter, more resilient strategies in the volatile crypto landscape.
Looking ahead, the market's reaction to such events often leads to consolidation phases, where identifying confluence in trend lines and volume profiles becomes key. For example, if Bitcoin holds above $105,000 in the coming sessions, it might invalidate bearish narratives and attract fresh longs, potentially pushing toward $120,000 resistance. Conversely, a break lower could target $95,000, opening shorting opportunities with tight stops. Altcoin traders should eye pairs like SOL/USDT, which saw volumes explode during the dump, for mean-reversion plays. Sentiment indicators, dipping to fear extremes post-crash, often precede rallies, making this a prime time for contrarian entries. Remember, successful trading isn't about avoiding losses but learning from them to refine edges in price action, volume, and macro correlations.
Material Indicators
@MI_AlgosA comprehensive crypto analytics platform offering trading signals and market data