Bitcoin Crash: Tariffs Overhyped or Leverage Flush Ahead of Labor Data Week?

• Overheated futures market led to $94 billion open interest peak before the crash.

• Trade deal news failed to spark a rebound, highlighting internal market dynamics over external tariffs.

• Upcoming U.S. labor data on November 7 could influence BTC’s path toward $107k support, with whale accumulation defending key levels.

Bitcoin October crash tariffs: Uncover why BTC’s 5.82% plunge and $19B liquidations stemmed from leverage flush, not trade wars. Explore positioning reset and labor data outlook for smarter crypto investing today.

What Caused the October Bitcoin Crash and Tariffs’ Real Impact?

The Bitcoin October crash on October 10 resulted in a sharp 5.82% decline, triggering record $19 billion in liquidations across the crypto market. Initial reports attributed this to escalating U.S.-China trade tensions under tariffs, but derivatives data reveals a more nuanced picture of overheated positioning. Despite the White House confirming a U.S.-China trade deal, Bitcoin’s price continues to face pressure, suggesting tariffs played a secondary role to internal market mechanics.

How Did Market Positioning Contribute to the Selloff?

Derivatives metrics indicated extreme leverage buildup prior to the crash. On October 7, Bitcoin’s open interest reached a record $94 billion, creating a stacked liquidity environment ripe for a flush. According to data from CoinGlass, this setup resembled engineered volatility to eliminate overleveraged positions, with tariffs serving as a narrative catalyst rather than the core driver.

Source: CoinGlass

The trade deal’s muted market response underscores this view. Short-term holder net unrealized profit and loss flipped negative, with spot prices dipping below the $113,000 cost basis. Open interest has since fallen below $70 billion, the lowest in ten days, signaling a healthier positioning for potential inflows from stronger investors.

Analysts from Glassnode note that such resets often precede accumulation phases, as seen in prior cycles where leverage unwinds paved the way for rallies. With Bitcoin approaching another macro event, the stage is set for volatility, but underlying support levels remain intact.

Frequently Asked Questions

Was the Bitcoin October Crash Primarily Due to U.S.-China Tariffs?

The crash on October 10, marked by a 5.82% BTC drop and $19 billion in liquidations, was more attributable to overheated derivatives markets than tariffs. Data from CoinGlass shows open interest at $94 billion pre-crash, indicating a leverage flush. The subsequent trade deal’s lack of positive impact further diminishes the tariff narrative’s role.

What Impact Will U.S. Labor Data Have on Bitcoin Price?

U.S. labor data, including the ADP Nonfarm Payrolls report on November 7, could sway Bitcoin’s trajectory amid a softening job market highlighted by Fed Chair Powell. A weaker-than-expected print might heighten recession fears, pressuring risk assets like BTC toward $100,000 support. Conversely, resilient data could bolster confidence and support a rebound above $107,000.

Source: TradingView (BTC/USDT)

Key Takeaways

• October Bitcoin Crash Driven by Leverage, Not Tariffs: The 5.82% drop and $19 billion liquidations stemmed from $94 billion open interest peak, per CoinGlass data, with trade tensions as a secondary factor.
• Market Reset Clears Path for Recovery: Post-crash, positioning improved with open interest below $70 billion and whale defenses at $100k, as short-term holders face losses below $113k cost basis.
• Labor Data Week Critical for BTC Direction: Monitor November 7 ADP report; weaker data may test $107k support, while strength could enable rotation back to $115k highs.

Conclusion

The Bitcoin October crash and surrounding tariff discussions reveal a market more influenced by internal derivatives dynamics than geopolitical noise. With cleaner positioning post-reset and whales actively defending $100k, Bitcoin stands poised for the next phase amid U.S. labor data uncertainties. As macro pressures evolve, investors should focus on key support levels and accumulation signals for informed positioning in this resilient asset class.