Bitcoin Breaks Below $120K, Altcoins Hit Hard

UPDATE: Crypto has collapsed much more – here’s our live coverage with latest news.

Bitcoin fell nearly 2% in the past hour, slipping below the $120,000 mark after maintaining levels above it for over a week. Ethereum and Solana were hit harder, each losing over 5% within the same period. The overall crypto market saw a rapid decline, with a sharp spike in liquidations totaling over $490 million, mostly from long positions.

The drop in crypto prices is related to losses across traditional financial markets. The S&P 500 fell over 1.2%, and the tech-focused Nasdaq lost 1.6%. The Dow Jones Industrial Average also saw a notable decline of nearly 400 points.

Tariff Escalation Between U.S. and China

The sell-off followed public statements by U.S. President Donald Trump, who announced that his administration is preparing a “massive increase” in tariffs on Chinese imports. The president also said he sees “no reason” to proceed with a planned meeting with Chinese leader Xi Jinping.

Some very strange things are happening in China! They are becoming very hostile, and sending letters to Countries throughout the World, that they want to impose Export Controls on each and every element of production having to do with Rare Earths, and virtually anything else they…
— Unofficial Trump on X (@trump_repost) October 10, 2025

In response, markets across multiple sectors reacted negatively. Chinese stocks, including Alibaba, Tencent, and Baidu, saw significant losses. Qualcomm, a U.S. tech company currently facing an antitrust investigation in China, fell more than 4.6%.

Crypto Moves in Line With Broader Risk-Off Sentiment

Although cryptocurrencies are not directly tied to international trade or tariffs, they are often categorized as high-risk assets by institutional investors. When macroeconomic uncertainty rises, portfolios are frequently rebalanced away from such assets.

Crypto sell-off caused a liquidation cascade – according to CoinGlass, over $490 million in leveraged positions were cleared in one hour, with $451 million of that from longs.

Crypto Fundamentals Are Not Affected

While it’s easy to get nervous when charts start turning red, it’s important to remember that the current market move is being driven by external geopolitical factors rather than internal developments within the crypto sector. There were no technical failures or security incidents reported across blockchain networks, and the long-term potential of crypto is unaffected.

Moreover, the recent volatility follows an already tense environment in global markets, with ongoing concerns over a U.S. government shutdown, delayed economic data releases, and weakening consumer sentiment. And despite the correction, Bitcoin remains less than 6% from it’s recent ATH.

Short-term Outlook Remains Uncertain

While the long-term outlook is unchanged, the events in the coming days might be unpredictable. If geopolitical tensions between the U.S. and China escalate further, additional market volatility is possible. Traders should now be watching for further policy announcements and responses from global markets, including central bank signals and potential retaliatory trade measures.