Introduction
Bitcoin plunged to its lowest level since July, crashing below $104,000 as escalating US-China trade tensions and massive institutional outflows triggered a brutal market sell-off. The cryptocurrency dropped over 5% in 24 hours, sparking approximately $1.18 billion in leveraged liquidations across crypto markets, with long traders absorbing nearly $917 million in losses. Simultaneously, spot Bitcoin ETFs recorded their largest single-day outflows since August, with $536 million fleeing the products on October 16, signaling a dramatic shift in institutional sentiment that threatens further downside pressure.
Key Points
- $1.18 billion in crypto liquidations occurred within 24 hours, with long traders losing $917 million
- Spot Bitcoin ETFs recorded $536 million in outflows on October 16, the largest single-day withdrawal since August
- Analysts warn Bitcoin could test $96,000 if ETF redemptions exceed $1 billion within 48 hours or miner sales resume
Market Carnage Spreads Across Major Cryptocurrencies
The crypto market bloodbath extended well beyond Bitcoin’s 5% decline to $103,300. Ethereum suffered even steeper losses, falling 9% to approximately $3,600, while Binance’s BNB token plummeted 11% to $1,048. The sell-off proved particularly brutal for altcoins, with XRP, Solana, Dogecoin, Tron, and Cardano each losing more than 7% during the same 24-hour period. This widespread decline marks a continuation of the market weakness that began a week earlier when President Donald Trump’s threat of 100% tariffs on China wiped nearly $20 billion from crypto market capitalization on October 10.
According to data from Coinglass, the cascading price drops triggered roughly $1.18 billion in leveraged liquidations within 24 hours, with long traders—those betting on market recovery—absorbing the overwhelming majority of losses at approximately $917 million. This pattern suggests that optimistic investors who entered positions expecting a rebound were caught completely off-guard by the severity of the downturn, forcing mass position closures as collateral requirements were breached amid the rapid price decline.
Geopolitical Tensions and Institutional Flight Fuel Decline
Analysts at Bitfinex identified the primary catalyst for the sharp downturn as a combination of macroeconomic pressures and structural triggers impacting the crypto industry. They noted that markets have grown increasingly reactive to geopolitical developments, with President Trump’s confirmation of new tariffs deepening fears of economic decoupling between the United States and China. ‘In the near term, we expect bouts of knee-jerk volatility, with any selling pressure in equities spilling over into crypto, tightening liquidity and weighing on leveraged positions,’ the Bitfinex analysts told CryptoSlate.
The institutional sentiment shift became starkly evident through spot Bitcoin and Ethereum exchange-traded funds (ETFs), which recorded combined outflows of approximately $600 million. According to SoSo Value data, US spot Bitcoin ETFs alone saw $536 million in outflows on October 16—their most significant single-day withdrawal since August. Ark Invest’s ARKB led the exodus with $275.15 million in outflows, followed by Fidelity’s FBTC with $132 million withdrawn. Grayscale’s GBTC and Grayscale Mini BTC products recorded $44.97 million and $22.52 million in outflows respectively, while BlackRock’s IBIT shed $29.37 million.
Other funds including Bitwise’s BITB and VanEck’s HODL saw modest declines of $20.58 million and $6.12 million respectively, while Invesco’s BTCO, Franklin Templeton’s EZBC, Valkyrie’s BRRR, and WisdomTree’s BTCW reported no net flows for the period. Timothy Misir, head of research at BRN, characterized this dramatic shift in ETF demand as having turned ‘a temporary pause into a structural headwind’ for Bitcoin’s price trajectory.
Analysts Warn of Further Downside Risk
The combination of geopolitical uncertainty and institutional withdrawal has created what analysts describe as a perfect storm for cryptocurrency markets. Bitfinex analysts cautioned that ‘if yield curves steepen and credit risk premiums widen, BTC could face some profit-taking before resuming any upward trajectory.’ This suggests that traditional financial market conditions are increasingly dictating crypto market movements, with tightening liquidity conditions posing particular challenges for leveraged positions.
BRN’s Timothy Misir issued an even more dire warning, noting that if combined ETF redemptions exceed $1 billion within 48 hours, or if miner sales resume, Bitcoin could test the $96,000 region before finding stabilization. This represents a potential 7% further decline from current levels and would mark Bitcoin’s lowest point since June. The analyst’s caution highlights how quickly sentiment has shifted from optimistic to defensive, with institutional flows now serving as a critical indicator for near-term price direction.
📎 Related coverage from: cryptoslate.com