Bitcoin Drops Below $110K After Tariff Shock - Why Structure Beat Panic

The weekend crash hit hard, catching overleveraged traders completely off guard. But for those watching structure and liquidity, this wasn’t random - it was a setup waiting to trigger.

Bitcoin and major markets fell sharply after new U.S.-China tariff headlines, but the real problem wasn’t politics - it was leverage meeting thin liquidity. When the system is stretched, one spark can light a fire.

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What Happened

Bitcoin, stocks, and crypto markets all tumbled after Trump announced 100% tariffs on major Chinese imports - a significant escalation that reignited trade war fears.

China had already restricted exports of key rare earth materials, so tensions were high before the announcement. When the news broke, large investors quickly reduced exposure across risk assets:

• Stocks fell sharply.

• Cash, gold, and the dollar gained.

• Crypto, being 24/7, took the first hit.

The result:

• $19B in leveraged crypto positions were liquidated within 24 hours.

• $400B in total crypto market cap was wiped out.

• Bitcoin dropped below $110K before finding temporary support.

This was a classic liquidity squeeze - not just panic, but a complete unwind of overextended positions.

Why We Caught the Move

We don’t predict tweets or political headlines - we follow structure. Before the drop, we had already mapped the $118K–$116K support zone as critical, with clear signs of weakness:

• Price was moving inside a downward channel.

• Key moving averages flipped to resistance.

• Lower lows showed that buyers were losing control.

• The $118K–$116K zone could only hold if leverage was balanced - it wasn’t.

When that zone broke, sell orders cascaded as liquidity evaporated. Our community shorted the break with low risk and simple execution - no guesswork, just structure.

👉 You can replay this exact scenario inside our Trading Simulator.

The Market Impact 🧨

Crashes like this reveal what’s under the surface. The market wasn’t reacting to just one headline - it was reacting to built-up stress.

Key takeaways:

• Leverage amplifies everything. Once liquidations start, momentum feeds itself.

• Liquidity pockets define velocity. The faster price falls, the thinner the order book becomes.

• Prepared traders thrive. Knowing your levels means you trade opportunity, not emotion.

Where Things Stand Now

✅ Scenario 1 - Recovery

If Bitcoin reclaims the $118K–$116K range, it neutralizes the downtrend for now. That recovery could open the door to retesting $120K, and possibly $122K–$124K.

⚠️ Scenario 2 - Range Resistance

As long as price remains under $118K–$116K, that zone flips into resistance. Any bounce toward it is counter-trend until confirmed otherwise.

🚨 Scenario 3 - Breakdown

If price loses $110K, it exposes a liquidity pocket that could drag price toward $102K quickly. That’s where forced liquidations tend to cluster - and where bigger buyers may re-enter.

Market Psychology

Every crash tells the same story: weak hands panic, strong hands prepare.

• Overleveraged traders react emotionally.

• Disciplined traders follow the plan.

The difference isn’t prediction - it’s preparation.

This is why mapping key zones matters. You can’t control the news, but you can control your reaction when it hits.

Lessons from the Move

• News triggers the move, structure guides it. Headlines are sparks - the chart is the fuel.

• Always respect leverage. High exposure means high risk, no matter the market.

• Be the calm in chaos. Preparation turns panic into opportunity.

Markets reward traders who treat volatility as information, not fear.

Bottom Line

The weekend selloff was fast and brutal, but it was also clear for anyone watching the chart. We identified the zone, managed risk, and executed with precision - no panic, just process.

As traders, we don’t get shaken by crashes. Whether up or down, structure gives us the edge. Congratulations to everyone who executed the plan perfectly. 👏

👉 Keep following setups like this in our Daily Insights and refine your breakout and breakdown strategy inside the Trading Simulator.

Disclaimer: This is not financial advice. All information is for simulation and educational purposes only.