The cryptocurrency market has lost nearly $200 billion in value as escalating trade tensions between China and the United States reignited global risk aversion.
This halted Bitcoin’s fragile recovery after last weekend’s record $19 billion liquidation.
Bitcoin price struggles
data from crypto slate The data shows that the industry’s overall market capitalization fell 3% to $3.79 trillion from $3.96 trillion the previous day.
Bitcoin struggled to break above the $115,000 resistance and fell more than 3% to $110,500, testing a key short-term support zone.
Notably, Ethereum, the second-largest crypto asset by market capitalization, is reflecting the economic downturn. ETH fell 4% below $4,000 before rebounding slightly, while BNB was down 12% from its recent high to $1201 at the time of writing.
Meanwhile, other top 10 digital assets such as XRP, Solana, Dogecoin, Tron, and Cardano fell more than 5% during the reporting period, further widening their losses on the day.
The broad selloff came after China reportedly announced new sanctions against five U.S. subsidiaries of Hanwha Ocean, one of South Korea’s largest shipbuilders.
The decision effectively bans interactions between Chinese companies and sanctioned companies and marks a significant escalation in the long-running dispute between China and the United States.
The move is not surprising, given that Chinese authorities warned in an Oct. 13 X post that “(they) will do what is necessary to protect their legitimate rights and interests.”
Meanwhile, the Chinese government’s restrictive measures come days after US President Donald Trump threatened to impose 100% tariffs on some Chinese imports in response to new export restrictions.
ETF outflows heighten market caution
The macro stress further added to the structural weakness already seen in the crypto market after the weekend liquidation event.
On October 13, the U.S. Spot Bitcoin ETF and Ethereum ETF experienced combined outflows of approximately $755 million, reflecting the continued vigilance of institutional investors.
Bitcoin-linked funds recorded $326 million in redemptions due to withdrawals from Grayscale’s GBTC and Bitwise’s BITB, according to SoSo Value data.
Notably, while other issuers like Fidelity have also recorded large outflows from their funds, BlackRock’s IBIT has been the only outlier with approximately $60 million in new capital inflows.
Meanwhile, the Ethereum ETF performed even worse, with an estimated $428 million in withdrawals from BlackRock’s ETHA product.
Still, Bitcoin and Ethereum products continue to enjoy unparalleled success this year, with these funds collectively attracting more than $76 billion in inflows since their launch in 2024.
What will happen to the price of BTC?
BRN Research Director Timothy Michiel said: crypto slate Bitcoin’s most recent technical zone is between $110,000 and $108,000.
He said this area represents the market’s main liquidity band. He noted that a decisive break below this range could open the way to $104,000, but a recovery and close above $115,000 would likely stabilize near-term momentum and keep $125,000 within range.
Misir also pointed out that lower open interest suggests crypto traders are averse to risk, which reduces the likelihood of sudden liquidations, but also means any new bull market will depend on true spot demand rather than leveraged flows.
He added that continued ETF inflows of more than $500 million per day would be the clearest signal that strength is returning.
Michelle concluded as follows:
“The market is in a risk management phase. Institutional flows have turned from neutral to negative, leveraged participants have largely exited, and prices are driven by spot reallocation and macro headlines. This reduces both the likelihood of a clean immediate breakout and the likelihood of a leverage-driven crash.”
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