The global digital asset market has seen a sharp decline following a wave of liquidations and new trade restrictions between the US and China. According to CoinGecko, the market capitalization of cryptocurrencies has decreased by more than $150 billion in 24 hours. Bitcoin fell by 4% to $111,200, and Ethereum fell by 7.8% to below $4,000. Smaller tokens have suffered even more.
The reason was China's decision to impose restrictions on the American units of South Korean shipbuilder Hanwha Ocean in response to US sanctions on the Chinese shipping sector, Bloomberg reports. This was a continuation of the escalation after US President Donald Trump's announcements of higher tariffs and new export restrictions.
Back on October 10, the market was shaken by a wave of liquidations worth about $19 billion in margin positions, which triggered a massive sell-off. Although cryptocurrencies partially recovered their losses on October 13, the decline has resumed today.
Investors' nervousness is also confirmed by the outflow of funds from exchange-traded funds: on Monday, $756 million was withdrawn from American ETFs for Bitcoin and Ether.
Analysts warn that a drop in Bitcoin below $110,000 could pave the way for testing the liquidity zone of $104,000–108,000. The analytical company Glassnode notes that the market is entering a consolidation phase, where caution and selective risk-taking will dominate.
The fall in cryptocurrencies has also hit companies investing in digital assets. In particular, Japan's Metaplanet Inc. lost 12% of its share value, and its market capitalization fell below the volume of its own Bitcoin reserves for the first time.