Digital Asset Derivatives Market Rattled by U.S.–China Trade Tensions Amid Trump’s Hardline Rhetoric

The digital asset derivatives market faced significant turbulence as former U.S. President Donald Trump’s aggressive stance toward China reignited fears of heightened trade conflicts. Trump’s remarks, which included the suggestion of terminating business ties, catalyzed a wave of volatility across major cryptocurrency markets and altcoins, triggering mass liquidations and exacerbating market instability.

---

Market Hit by Surge in Liquidations

Over the past 24 hours (as of October 15, KST), the derivatives market experienced an acute wave of liquidations, according to data from Coinglass. A total of $689.01 million was liquidated—marking a sharp 73.04% increase compared to the prior day. Long positions were disproportionately impacted, accounting for $480.1 million or 69.67% of the total liquidations, while short positions saw $208.8 million liquidated.

Ethereum and Bitcoin Drive Losses

Ethereum (ETH) led the market in liquidation volume, with $229.35 million wiped out in a single day. ETH’s price declined by 2.91% compared to the day before, triggering $146.46 million in liquidated long positions. Bitcoin (BTC) followed closely with $171.2 million in total liquidations, driven by price losses of 1.73%. BTC long liquidations reached $126.21 million, underscoring the vulnerability of bullish bets on major cryptocurrencies.

---

Altcoins Under Pressure: Solana and XRP Take Heavy Losses

The fallout extended to the altcoin segment, with Solana (SOL) experiencing the largest liquidation volume among smaller assets. SOL’s price dropped by 3.28%, erasing $40.99 million in liquidation value. Long liquidations outweighed shorts, contributing $28.61 million to the total compared to $12.38 million from shorts. XRP was similarly affected, seeing $14.93 million in liquidations, with $14.16 million stemming from long positions—nearly triple the volume of short liquidations.

Broader Altcoin Performance

Other major altcoins also absorbed significant losses. Binance Coin (BNB) and Dogecoin (DOGE) recorded $14.16 million and $12.14 million in liquidations, respectively. Despite recent bullish maneuvers in select markets, intensified selling pressure suggests bearish sentiment is firmly entrenched across the sector. Individual liquidation events reached stark highs, including a single trader who lost $11.99 million on Binance’s ETH-USDT pair.

---

Hype Token Plummets Amid Broader Declines

The Hype token (Ticker: HYPE) experienced the deepest price drop in the derivatives market, falling by 8.62%. Liquidation values topped $9.26 million, with $6.82 million stemming from long positions. HYPE’s performance highlights the vulnerability of speculative assets during periods of heightened volatility.

---

Elevated Trading Activity Amid Mass Liquidations

The surge in liquidations coincided with marked increases in trading activity. The number of liquidated traders jumped by 22%, rising to 199,174 from 162,659 the previous day. Total trading volumes climbed 25.14% to $468.4 billion, indicative of intensified market churn. However, open interest (OI), which measures outstanding positions, declined 3.36% to $161.4 billion—a potential signal of widespread unwinding amidst significant price fluctuations.

Market sentiment reflected the prevailing uncertainty. The Fear and Greed Index remained positioned in the “neutral” range at 42, while the Relative Strength Index (RSI) tilted slightly bearish at 47.65. Analysts suggest traders are bracing for further downside risks following the recent correction.

---

Macro Forces Behind Volatility: U.S.–China Trade Tensions

The latest disruptions appear closely linked to resurfacing U.S.–China trade tensions. Trump’s incendiary remarks on his Truth Social platform reignited fears of an escalating economic conflict. The former president accused China of deliberately restricting soybean purchases and proposed severing business ties over critical imports, including edible oils. Beijing responded with threats of export controls on key materials such as high-end lithium-ion batteries and synthetic diamonds.

These trade-related shocks added fuel to an already fragile derivatives market, which had only recently weathered a liquidation episode amounting to $1.9 billion just five days earlier. Industry experts warn that the ripple effects of escalating geopolitical tensions are likely to persist as investors react to macroeconomic uncertainty.

Technical Weakness Amplifies Selling Pressure

The broader technical conditions of the crypto market remain fragile. A strategist noted that approximately 90% of altcoins listed on Binance are trading below their 200-day moving averages, diminishing the likelihood of a near-term recovery. This technical backdrop, coupled with macroeconomic headwinds, suggests prolonged instability in the sector.

---

Forecast: Prolonged Volatility Ahead

With macroeconomic uncertainties converging alongside weak technical indicators, the digital asset derivatives market appears poised for extended turbulence. Investors are advised to tread cautiously as short-term corrections threaten to evolve into broader downturns. While trading volumes remain elevated, signaling active participation, the prevailing sentiment points to bearish momentum dominating in the weeks ahead.

Traders navigating volatile markets should monitor geopolitical developments closely and reassess risk management strategies to mitigate losses in this precarious environment.