Bitcoin's price fell from a peak above $126,000 to below $104,000 in just 10 days during October 2025, erasing gains from an earlier rally. The drop, which wiped out $600 billion from the crypto market, was triggered by renewed U.S.-China trade threats from President Trump, alongside banking concerns, ETF outflows, and geopolitical uncertainties. Analysts warn of potential further declines into 2026.
Bitcoin began October 2025 strongly, surging nearly 18% to a new all-time high above $126,000 within the first 10 days, adding over $16,000 in value. However, the momentum reversed sharply, with the price tumbling more than 13% to lows around $101,000 on some exchanges by Friday, October 18. This correction, dubbed a 'flash crash' by some, led to the liquidation of over $19 billion in leveraged positions, including $9.4 billion in a single 24-hour period—described by analysts as the worst in crypto history.
The primary catalyst was U.S. President Donald Trump's announcement of fresh 100% tariffs on Chinese imports and export controls on critical software, reigniting trade war fears. Bitcoin reacted immediately, dropping from over $122,000 to under $117,000, before further sliding to $110,000 or lower as futures positions were wrecked in an overleveraged market. Reports later suggested the threats were exaggerated, allowing a partial recovery to $116,000, but uncertainty persisted.
Compounding the pressure were geopolitical developments, including Trump's meeting with Russia's Putin on Thursday and a visit from Ukraine's Volodymyr Zelenskyy on Friday, amid reports that Ukraine might not receive requested Tomahawk missiles. The ongoing U.S. government shutdown, lasting over two weeks, added to the instability.
In the traditional finance sector, fears of a banking crisis echoed the 2023 Silicon Valley Bank failure. Zions Bancorp reported a $50 million charge-off on two California commercial loans, while Western Alliance filed a fraud lawsuit against a borrower, sparking global bank stock declines, including for Deutsche Bank, Barclays, and Société Générale.
Spot Bitcoin ETFs, which saw nearly $6 billion in inflows over nine days in late September, reversed course with over $1.2 billion in outflows for the week: $4.5 million initially, then $326.4 million on Monday, $104.1 million on Wednesday, $530 million on Thursday, and $366 million on Friday.
Meanwhile, gold rallied to a new high of almost $4,400 per ounce, highlighting Bitcoin's underperformance as 'digital gold.' Investor Peter Schiff commented on X: “Bitcoin is now down 32% priced in gold since its August high. This bitcoin bear market will be brutal. HODLers, sell your fool's gold now and buy the real thing, or have fun going broke.”
Analysts offered mixed outlooks. John Glover of Ledn declared the bull run over, predicting a bear market lasting into late 2026 with prices potentially retesting $70,000 to $80,000. David Siemer of Wave Digital Assets noted panic selling and volatility but remained cautiously optimistic for a fourth-quarter recovery if the Federal Reserve pivots dovishly and trade policies ease. The crypto market cap fell 5% to $3.57 trillion on Friday, with Bitcoin struggling to hold support above $107,000. Echoing a March-May drawdown of 30% triggered by similar tensions, experts suggest turbulence could extend into November unless risk appetite returns.