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The Trump China tariff announcement triggered a sudden market shock that forced rapid deleveraging in perpetual futures, causing the largest single-day crypto liquidation event on record and devastating highly leveraged traders across centralized exchanges.
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Sudden policy shock triggered derivatives liquidations
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Roughly $19 billion in liquidations were reported within 24 hours, with some estimates higher.
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About 1.6 million leveraged positions were wiped out amid a cascade of forced closes.
Trump China tariff leveraged traders: 100% tariff sparked a historic crypto liquidation event; learn key figures, causes, and risk steps to protect leveraged positions.
Published: October 11, 2025. Updated: October 11, 2025. Author/Organization: COINOTAG
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How did Trump’s 100% tariff on China devastate leveraged crypto traders?
Trump China tariff leveraged traders were devastated because the late-Friday announcement created an immediate risk-off impulse that concentrated global flows into crypto markets, producing abrupt price swings. These swings forced exchanges to liquidate overleveraged perpetual futures positions, producing the largest single-day liquidation event in crypto history.
How do perpetual futures and leverage trigger liquidation cascades?
Perpetual futures (perps) allow traders to hold positions without expiry while paying or receiving small funding payments to align contract and spot prices. When a market-moving news event hits outside regular equity hours, liquidity thins and the spot price can gap sharply. Traders using high leverage amplify both gains and losses; a modest percentage move can wipe margin, prompting exchanges to automatically liquidate positions. That rapid, automated process can cascade as forced sells push prices further, causing additional liquidations. Reporting cites roughly $19 billion in liquidations within 24 hours (some analysts say $30B+ when accounting for underreported centralized exchange activity), and platforms tracking open interest show over $75 billion across Bitcoin futures.
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Frequently Asked Questions
How much did leveraged crypto traders lose in the tariff-driven crash on October 10?
Reported liquidations totaled approximately $19 billion within 24 hours, with some independent analysts and market trackers estimating total realized and unrealized losses could exceed $30 billion when accounting for off-reporting by some centralized exchanges. CoinGecko price data cited the intraday lows during the event.
Why did Bitcoin fall so fast after the announcement?
The tariff news hit after U.S. equity hours, concentrating selling pressure into crypto markets where global participants could immediately trade. Thin liquidity, concentrated perp positions, and funding-rate imbalances turned the initial shock into a rapid cascade of forced liquidations, driving a steep, short-term price drop.
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Key Takeaways
- Event timing mattered: The late-Friday announcement concentrated market reaction into crypto venues, where trading remained fully open.
- Perps magnified risk: Perpetual futures and elevated leverage turned a price shock into cascading liquidations across exchanges.
- Risk management is crucial: Traders should monitor funding rates, open interest, and use prudent leverage limits to reduce vulnerability to sudden macro shocks.
Conclusion
The October tariff announcement demonstrated how macro policy shocks can propagate through crypto markets, hitting leveraged traders hardest via the perpetual futures market. Official price feeds such as CoinGecko, industry providers like RedStone, and derivatives platforms including Hyperliquid reported the scale of liquidations and open interest. For traders and risk managers, the lesson is clear: maintain conservative leverage, monitor funding and liquidity metrics, and prepare for cross-market contagion. COINOTAG will continue to monitor developments and publish updated analysis as official data and exchange reports are released.
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Source: https://en.coinotag.com/trumps-china-tariff-announcement-may-have-triggered-bitcoin-plunge-and-roughly-19-billion-in-leveraged-liquidations/
