The cryptocurrency market is beginning to recover from a significant downturn that led to one of the most severe liquidation events in its history.
On Friday, Bitcoin’s value plummeted from $121,000 to as low as $109,000 within seven hours, erasing gains from an earlier rally. Ethereum dropped to $3,686 and Solana hovered just above $173 according to CoinGecko data.
This turbulent trading session caused a “flash crash of liquidations,” resulting in nearly $7 billion being wiped out across all markets in just one hour. Of this amount, approximately $5.5 billion came from long positions, explained Sean Dawson of Dervie on-chain options platform.
By the end of the day on Friday, almost $20 billion had been liquidated across digital assets with long positions accounting for about $16.7 billion of this total according to CoinGlass data.
Dawson noted that it was “the largest single-day wipeout in crypto history.”
The stock market also suffered losses; Nasdaq fell by 3.6%, S&P 500 decreased by 2.7%, and Dow Jones declined by 1.9%.
This sell-off occurred after President Trump announced he was canceling a meeting with Chinese President Xi Jinping and planned a “massive increase” in tariffs on Chinese imports—a decision he admitted could be painful for Americans.
Trump’s tariff warning followed China’s move to limit exports of rare earths and critical minerals—escalating tensions between these two major economies further.
Over the weekend however China seemed more conciliatory leading analysts suggest that initial market reactions were likely exaggerated due geopolitical concerns rather than fundamentals changing significantly overnight..</</</<>//>/>/>/>>/>>>>/>>>/>/></>>>>//<<<<///////<///////<<///////////</////////<///<<<<<<<<<<<<<<>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>><<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Dean Serroni CEO Merkle Tree Capital investment manager told Decrypt what we're witnessing here classic relief rally .
Ethereum surged 11%; short-covering mean reversion following overreaction Trump’s tariff announcement said .
Serroni highlighted thin selling pressure reset open interest derivatives markets volatility spiked due overleveraged traders .
Bitcoin rose 5%; reaching $ ;115 ,100 while Ethereum increased 1 ;0 & #4 ;5 % & #59 ; hitting & #36& #59;&4&1&38&,CoinGecko reports show meanwhile altcoins like Solana BNB Dogecoin climbed12%16&;%11%.4%respectively.
“This episode was geopolitical knee-jerk not structural break” Serroni concluded.