Title: Crypto Crash Today: Bitcoin Drops to $113K — Trade War Fallout Explained
Meta description: Bitcoin plunges to $113K amid trade war shock. We unpack causes, liquidations, and what savvy investors can do next.
Bitcoin cratered to $113,000 today in a ferocious, broad-based selloff that rattled crypto and risk markets alike. The drop followed an escalation in trade tensions that turbocharged the dollar, drained liquidity, and triggered cascading liquidations across derivatives. In this CyReader deep dive, we break down what happened, why the “trade war 2.0” matters for digital assets, and the smartest moves investors can consider next.
Crypto Crash Today: Bitcoin Slumps to $113K
Bitcoin’s slide to $113K arrived in a rush: a stronger dollar, spiking yields, and a sharp risk-off turn across equities set the tone in pre-market hours. Once BTC lost its weekly support shelf, derivatives positioning did the rest. Perps funding flipped violently, spot-ETF outflows accelerated, and billions in leveraged longs were forced out, compounding the move. By the U.S. open, the market was in classic “air pocket” territory—thin bids, wide spreads, and bots chasing momentum.
On-chain and order-book signals painted a familiar picture of stress. Short-term holders—addresses with coins younger than 3 months—were the first to panic, sending coins to exchanges at the fastest clip since the last major flush. Meanwhile, long-term holders mostly sat tight, though miners added to sell pressure by offloading treasuries as hashprice compressed and hardware costs rose. Stablecoin netflows skewed negative as market makers pulled liquidity from alt pairs, amplifying cross-venue dislocations.
Comparisons to past crashes help calibrate expectations. Unlike the 2022 insolvency cascade, this drawdown is macro-led: a policy shock rippled through funding markets, not a credit failure inside crypto. That matters. Macro-led crashes often stabilize faster once policy signals clarify and liquidity returns. Still, until volatility cools and ETF flows stabilize, expect elevated intraday swings and correlation to equities to remain high.
Trade War Fallout Explained: Causes and Next Steps
So why did trade tensions hit crypto so hard? Three channels converged. First, the dollar spike: tariffs and export controls pushed investors to seek safety in USD and short-duration Treasuries, draining risk appetite globally. Second, supply-chain constraints—especially on advanced chips and mining equipment—raised miner operating risks and capex uncertainty. Third, cross-border capital frictions tightened USD funding for offshore desks, reducing depth on major spot and derivatives venues.
ETFs, miners, and market structure transmitted the shock. U.S. spot Bitcoin ETFs saw net outflows as wealth platforms de-risked, forcing authorized participants to unwind baskets and sell spot into weakening bids. Miners, squeezed by higher energy and hardware costs, sold more coins to cover opex and hedged future production through forwards. At the same time, perpetual futures were crowded long; once key levels broke, automated de-leveraging created a feedback loop of forced selling and wider basis.
What should investors watch next? Three signposts: policy guidance, liquidity gauges, and tech flows. If trade rhetoric cools or tariffs are staged over time, the dollar could ease—relieving pressure. Stablecoin supply growth (especially in USD rails) would hint at returning risk appetite. Finally, ETF flow pivots and narrowing futures basis typically precede calmer price action. Actionably, consider staged entries over time, set disciplined stop levels, and prioritize custody and counterparty safety while volatility remains elevated. This is not financial advice.
Frequently Asked Questions (FAQ)
Q: Why did Bitcoin drop to $113K today?
A: A sharp risk-off move tied to escalating trade tensions boosted the dollar, raised yields, and thinned crypto liquidity. Leveraged long positions were then liquidated, ETFs saw outflows, and miners added supply—pushing BTC down to $113K.
Q: Is the crypto crash directly linked to the trade war?
A: Yes, through macro channels. Tariffs, export controls, and capital frictions strengthened the USD and drained global risk appetite, triggering de-leveraging in crypto markets and reducing market depth.
Q: Should I buy the dip or wait?
A: Consider dollar-cost averaging with strict risk controls. Wait for signs like stabilizing ETF flows, cooling funding rates, and reclaiming key weekly levels. Always size positions for volatility and avoid excessive leverage. Not financial advice.
Q: How are spot ETFs and miners affected?
A: Spot ETFs faced redemptions as advisors de-risked, forcing spot sales that pressured price. Miners faced higher energy and equipment uncertainty, prompting treasury sales and hedging—adding incremental sell pressure.
Q: What happens to altcoins during Bitcoin crashes?
A: Alts typically underperform due to thinner liquidity and higher beta. During BTC-led selloffs, spreads widen and correlations rise, so many alt pairs see steeper percentage declines and slower recoveries.
Q: How can I protect my crypto during volatility?
A: Use reputable, proof-of-reserves exchanges for trading only; move long-term holdings to a hardware wallet (see our Ledger Nano X review) and enable multi-factor security. Consider limit orders, staged entries, and avoid over-leverage.
Q: When could Bitcoin recover?
A: Historically, macro-led drawdowns stabilize once policy signals clarify and liquidity returns. Watch for a softer dollar, improved stablecoin inflows, narrowing futures basis, and net inflows into spot ETFs.
Call to Action: Keep Learning and Stay Secure
- New to self-custody? Read our Beginner’s Guide to Hardware Wallets and compare Ledger vs. Trezor for security and ease of use.
- Trading through volatility? Check our tutorial: How to Use Stop-Loss and Take-Profit on Top Exchanges.
- Want a macro edge? Bookmark our Weekly Crypto Macro Watch: Dollar, Yields, and ETF Flows.
- Filing taxes after a rocky quarter? See our Best Crypto Tax Software roundup and our guide to tax-loss harvesting.
- Building a safer setup? Explore our Secure Crypto Storage Checklist and our picks for the best VPNs for traders.
Internal linking opportunities on CyReader
- Bitcoin Halving Timeline: What It Means for Miners and Price
- Best Crypto Hardware Wallets (2025): Ledger, Trezor, Keystone Compared
- Proof-of-Reserves: How to Verify Your Exchange Really Holds Your Coins
- Perpetual Futures vs. Spot: Risks, Funding, and Basis Explained
- Stablecoins 101: Choosing Safer USD Rails When Markets Whip
Affiliate-friendly resources (use trusted vendors)
- Secure a hardware wallet today: Ledger Nano X and Trezor Model T deals
- Protect your identity and connection: best VPN offers for traders
- Track every trade automatically: crypto portfolio and tax apps with exchange sync
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Today’s slump to $113K underscores a hard truth: in a macro shock, crypto trades as high-beta risk. The good news is that structure-driven crashes can heal quickly once liquidity normalizes and policy signals settle. Stay nimble, prioritize security, and let data—not fear—set your next move. For ongoing updates, bookmark CyReader’s Crypto News hub and subscribe to our weekly macro brief.
