Author: seedly.eth

The festive expectations of "Uptober" were abruptly interrupted in the second week of October.

The market's collective anticipation for "Uptober" was put on pause by Trump's new round of tariff threats. On Friday local time, Trump announced that in addition to the existing 30% tariffs, an additional 100% tariff would be imposed on goods from China, effective November 1 or earlier.

U.S. stocks experienced their largest single-day drop in months, and the cryptocurrency market quickly turned into a bloodbath.

Bitcoin plummeted from over $122,000 on Friday morning to about $104,582.41, a single-day drop of 7%. This decline nearly wiped out all gains made since the beginning of October, bringing the price back to the level of October 1.

Ethereum saw an even steeper decline, dropping nearly 8% to around $3,975, marking a new low for October. Solana (SOL) followed closely behind, with a single-day drop of over 7%, bringing its price down to $205. Like Ethereum, Solana also hit its lowest point since October.

WLFI (the native token of World Liberty Financial), associated with the Trump family platform, was not spared either. Following Trump's announcement of tariffs on China, WLFI immediately plummeted over 17%.

According to CoinGlass data, nearly $10 billion in liquidations occurred in the past 24 hours, affecting over 1.52 million people.

U.S. stocks recorded their worst single-day performance since April: the Nasdaq Composite Index fell the most, closing down 3.56%. The S&P 500 closed down 2.71%, marking the largest single-day percentage drop since April 10. The Dow Jones Industrial Average closed down 1.90%.

After Wall Street closed, market panic did not subside. Tech stocks like Nvidia, Tesla, Amazon.com, and Advanced Micro Devices (AMD) all fell over 2% in after-hours trading.

Macroeconomic Risks Hit Market Vulnerability

Analysts generally believe that concerns over the trade friction between the two major economies, the U.S. and China, potentially evolving into a full-blown trade war, are key factors leading to the simultaneous drop in stocks and cryptocurrencies.

"A brutal day," commented Ram Ahluwalia, founder of investment firm Lumida Wealth, stating that Trump's tariff actions triggered a comprehensive "de-risking" behavior. Investors fled from high-volatility assets closely tied to economic growth prospects, such as stocks, tech stocks, and cryptocurrencies, seeking safe havens. He noted, "Trump's news combined with the 'overbought' situation led to a significant market drop."

Zaheer Ebtikar, founder and Chief Investment Officer of crypto hedge fund Split Capital, stated: "The altcoin market has completely collapsed, reaching its highest level in over a year. Leverage has been reset across the board, and the market is in chaos."

This sell-off, especially with U.S. stocks recording their largest drop in months, has reignited concerns about whether the market will face a significant downward adjustment. Jamie Dimon, CEO of JPMorgan Chase, had previously warned that the risk of a major correction on Wall Street has increased over the next six months to two years.

Before this sharp decline, the U.S. stock market was in a record-breaking rally, with the S&P 500 and Nasdaq just hitting all-time highs on Thursday. Year-to-date, the Nasdaq has risen about 15%, and the S&P 500 has increased about 11%. This rally was primarily driven by the fervor surrounding the artificial intelligence (AI) sector.

However, some investors believe that the current trade tensions are unlikely to fundamentally alter the market trajectory. For instance, James St. Aubin, Chief Investment Officer of Ocean Park Asset Management, stated that while this is a "significant issue" and could trigger a pullback, he "doesn't necessarily think it will derail the AI theme that has been driving the market."

For the cryptocurrency market, the failure of "Uptober" signifies a rapid shift in market sentiment from the enthusiasm and historical high expectations at the beginning of the month to a sensitivity and caution regarding macro risks. Unless the trade situation quickly eases or new strong positive news emerges, the crypto market will face challenges and may need time to digest this sudden "Red October scare."

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