Bitcoin experienced a significant drop on Thursday, dragging down major cryptocurrencies such as Ethereum, Solana, and XRP in a widespread market sell-off. The decline followed the conclusion of a highly anticipated meeting between U.S. President Donald Trump and Chinese leader Xi Jinping, which failed to yield substantial results.
As a result of the sell-off, Bitcoin fell below $108,000, representing a roughly 4% decrease within a 24-hour period, according to data from CoinGecko. Just weeks prior, Bitcoin had reached an all-time high of $126,080 at the start of October, a month many observers had dubbed “Uptober” for its historical context of strong gains in both cryptocurrency and stock markets. Now, however, Bitcoin sits nearly 15% below that record level.
Ethereum, the second-largest cryptocurrency by market cap, also saw a decline, dropping around 5% to a recent price of just over $3,782. Other leading cryptocurrencies, including Solana, XRP, and Dogecoin, faced similar downturns, each dipping by about 6%. The overall sentiment in the market was stark, with altcoins taking even greater hits than Bitcoin.
Adding to the turbulence, liquidations in the crypto futures market surged past $1.1 billion in a single day. The majority of these liquidations represented positions that had anticipated rising prices for Bitcoin and Ethereum. Bitcoin accounted for nearly $500 million of the liquidations, while Ethereum contributed over $250 million.
The sell-off was exacerbated by remarks from Federal Reserve Chair Jerome Powell, who indicated that the central bank may not implement further interest rate cuts this year. Historically, both Bitcoin and stocks have enjoyed favorable conditions in low-interest-rate environments, and the Fed had already cut rates in its last two meetings. Powell’s comments seemed to catch traders off guard, as they had anticipated a more optimistic signal that would encourage riskier investments.
Strahinja Savic, head of data and analytics at FRNT Financial, noted that the market’s reaction to mixed signals reflects a shift in sentiment among shorter-term investors, who were adjusting their positions based on the lack of expected catalysts for growth. Similarly, Greg Magadini, Amberdata’s Director of Derivatives, commented on the market’s stance going into the meetings, stating, “Now it’s like, ‘What’s the next reason for markets to go higher?’—so a sell-off makes sense to me.”
Trump’s trade policies and trade war with China have historically influenced market performance since the outset of his presidency. Although he is seen as a crypto-friendly leader, his unexpected tariff announcements have frequently led to declines in Bitcoin and tech stocks categorized as “risk-on” assets. Following the recent meeting with Xi, which Trump described as “truly great” and “amazing” and included a 10% reduction in tariffs on China, market reactions remained unenthusiastic, with U.S. stock indices trading lower the next day.
As traders navigate these tumultuous conditions, they remain vigilant for signals that might indicate a turnaround in market sentiment, while grappling with the realities of current economic indicators and geopolitical uncertainties.
