- Bitcoin inflows to exchanges halved after volatility triggered by trade tensions.
- Market panic led to historic liquidations.
- Exchange balances hit a six-year low.
Bitcoin inflows to exchanges dropped by half in October 2025 after a U.S.-China trade tension led by former President Donald Trump caused global financial turmoil.
This dramatic shift highlights increased market anxiety and could indicate a longer-term reduction in liquidity and trading activity across cryptocurrency platforms.
An unexpected U.S.-China trade escalation on October 10, 2025, led to massive market volatility. The move prompted a significant shift in market sentiment. Bitcoin inflows to exchanges dropped markedly, reflecting traders’ caution and a reduced risk appetite.
The triggering entity was former U.S. President Donald Trump who announced a 100% tariff on Chinese imports. This action caused global economic uncertainty, impacting crypto exchanges like Binance and Coinbase with outages and trading halts.
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The immediate effects were felt strongly across crypto exchanges, with traders rushing to withdraw Bitcoin to cold wallets. Panic-driven withdrawals left exchange balances at a six-year low, revealing growing investor caution and defensive strategies.
“When the system is overleveraged, volatility hunts the weak hands, and they pay the price,” articulated Arthur Hayes, Co-Founder, BitMEX
This market panic resulted in the largest single-day liquidation event, with more than $19 billion in leveraged positions evaporating. Traditional and DeFi exchanges saw disruptions, while Bitcoin prices dropped significantly from $123,000 to $105,000.
Bitcoin, Ethereum, and altcoins suffered massive price declines. On-Chain Analytics noted that “Bitcoin exchange supply at a multi-year low demonstrates how quickly risk-off sentiment can materialize, especially after a systemic shock.”
Ethereum and Solana saw dramatic losses, reflecting investor fears amid ongoing geopolitical tensions and fiscal uncertainties. Historical comparisons highlight how systemic shocks like these alter market dynamics. Insights indicate a potential long-term impact as traders adopt a more cautious stance. On-chain data provides context to market sentiment, emphasizing the retreat to safe, long-term holdings.
