Cryptocurrency markets rebounded strongly on Monday after former President Donald Trump softened his approach to trade tensions with China, easing fears of an escalating trade war. Trump posted on Truth Social that relations with China 'will all be fine' following his Friday announcement of potential 100% tariffs on Chinese goods, which had triggered a massive market rout.
The initial tariff proposal wiped roughly $2 trillion from US equity markets and caused a flash crash in crypto, eliminating nearly $19 billion in leveraged positions—the largest single-day liquidation on record. Over 6,300 wallets were liquidated on Hyperliquid exchange alone, with some traders losing millions as Auto-Deleveraging mechanisms activated amid depleted insurance funds.
Bitcoin recovered to around $114,665, up 2.7% in 24 hours, while Ethereum surged 8.3% to $4,135. Alternative cryptocurrencies led the bounce, with Cardano and Dogecoin both gaining nearly 10%. BNB jumped 13.9%, XRP rose 7.4%, and Solana added 7.2% as traders hunted for bargain prices.
Justin d’Anethan, head of partnerships at Arctic Digital, described the event as 'a massive emotional reset', noting that while volatility punished traders, the longer-term market structure remained intact with strong ETF inflows and exchange balances near cycle lows. Trump suggested the US and China would reach an agreement before the November 1 tariff deadline, and China's Ministry of Commerce eased concerns by clarifying that rare-earth export controls would not constitute a blanket ban.
Jeff Mei, COO at BTSE, stated that if US-China tensions don't escalate into a full trade war, the market will likely recover and push toward all-time highs. Analysts expect the crypto market's path forward to depend heavily on interest rates and overall risk appetite, with the Crypto Fear and Greed Index plummeting from 64 (greed) to 27 (fear) during the crash before stabilizing.
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