Crypto Liquidations Near $1B as Trump Signals Renewed China Tensions

The broader crypto market joined global equities in heavy selling Friday, driven by escalating tensions between the U.S. and China. As of writing, the total crypto market cap was down about 2%, hovering near $4 trillion.

Bitcoin slid ~3%, dipping below $119,000, while Ethereum dropped more than 6%, trading near $4,100. On Wall Street, the Dow tumbled about 500 points to around 45,908, and the Nasdaq slid ~2% to near 22,552.

Liquidations Surge

As markets roiled, an estimated 203,684 traders were liquidated, totaling ~$881 million in wiped-out positions. The largest single liquidation occurred on Hyperliquid in a BTC-USDT trade worth roughly $15.5 million.

Of those liquidations, more than $709 million came from longs — underscoring a sharp long squeeze amid an increasingly bearish market.

Meanwhile, on-chain insights from Lookonchain revealed that a notable Bitcoin trader (dubbed the “Bitcoin OG”) profited from a recent short trade, with unrealized gains exceeding $35 million.

Why the Downturn?

U.S.–China Trade Flare-Ups

At the heart of today’s selloff: renewed trade hostilities between China and the United States. President Trump floated the possibility of imposing heavy tariffs on Chinese goods in response to China’s recent export controls on rare earths, notably magnets. He also suggested there’s “no reason” to meet with Xi anymore. These remarks immediately rattled investor confidence and heightened fears of a fresh global trade war.

In past months, Trump has already used executive orders to raise tariffs, which has contributed to volatility in crypto and equity markets.

U.S. Government Deadlock

The political gridlock in Washington is compounding market uncertainty. Currently, the U.S. SEC has missed its deadline to rule on a spot crypto ETF due to the broader government shutdown.

Further, paralysis in Congress is delaying the CLARITY Act — proposed legislation that many in the crypto space had hoped would bring regulatory certainty. Reports suggest bipartisan friction is hampering progress.