Most major cryptocurrencies experienced a notable rebound after a tumultuous weekend, during which they suffered steep losses. This recovery comes alongside President Donald Trump’s attempts to alleviate trade concerns between the United States and China. According to data from CoinGecko, the combined market value of all cryptocurrencies surged over 6%, surpassing the $4 trillion mark on Monday. Bitcoin, which had plummeted below $105,000 on Friday, was trading around $115,000 by Monday morning in London. Similarly, Ether saw a recovery, rising back to approximately $4,100 after dipping below $3,500.
The turnaround in the cryptocurrency market coincided with statements made over the weekend by Trump and Vice President JD Vance, who expressed a willingness to negotiate with China, thereby reducing immediate trade tensions. This shift in sentiment followed a day of panic when a record $19 billion in crypto bets were wiped out due to the introduction of severe new tariffs by Trump announced on Friday. The selloff was exacerbated by factors such as leveraged trades, which triggered automatic sales, and low liquidity during off-peak trading hours, compounding losses for many traders.
Richard Galvin, co-founder of hedge fund DACM, attributed the rebound largely to the conciliatory tone from the president. Despite the recent uptick, Galvin cautioned that many smaller tokens—referred to as altcoins—are still trading significantly lower than they were on October 9. He pointed out that the overall market remains vulnerable to “headline risk,” particularly with the potential for further trade escalations or unexpected economic developments as the year progresses.
The effects of the recent selloff were widespread. Ethena USDe, noted as the third-largest stablecoin, briefly lost its peg to the dollar, while Binance, the leading digital-assets exchange, suffered from technical glitches. Data from Coinglass revealed that over 1.6 million traders faced liquidation during the turmoil. As executives reflect on the week ahead, many are left uncertain about the extent of the damage and whether any major players were disproportionately affected, recalling concerns from previous market collapses, such as the notorious bankruptcy of Sam Bankman-Fried’s FTX.
The turmoil has resulted in a significant drop in funding rates—the interest fees paid by bullish traders taking on leveraged positions. Coinglass reported that these rates have fallen to their lowest levels since the FTX implosion in 2022, marking a deeply impactful reset in the crypto landscape. Additionally, Caladan, a crypto market maker, indicated that the crash led to a halving of open interest in Bitcoin and Ether options, with figures dropping to $33 billion and $19 billion, respectively. Galvin observed that this reset might establish a more stable pricing environment in the medium term, offering a glimmer of hope for market participants moving forward.
