Most major cryptocurrencies have rebounded after a sharp weekend sell-off as U.S. President Donald Trump works to ease U.S.-China trade concerns. According to data from CoinGecko, the total market value of all cryptocurrencies rose more than 6% on Monday to exceed $4 trillion. Bitcoin was trading around $115,000 in early London trading on Monday, after falling below $105,000 in the United States on Friday. Other smaller coins also recovered some of their losses, with Ethereum rebounding from below $3,500 to around $4,100.
The rebound coincided with comments from President Trump and Vice President J.D. Vance on Sunday that they were open to a deal with China, easing concerns about trade tensions. This comes after Trump announced tough new tariffs on China on Friday, which triggered a record $19 billion in cryptocurrency bets to be wiped out and crypto prices fell sharply. Some leveraged trading, automatic forced liquidation, and insufficient liquidity in global trading during non-active hours further exacerbated trader losses.
"This rebound is driven by Trump's conciliatory signal." Richard Galvin, co-founder of hedge fund DACM, said. However, he also pointed out that most so-called "altcoins" (small tokens) are still trading well below the levels on October 9. "Looking ahead, headline risks remain elevated, with markets continuing to be exposed to trade escalation news or other extreme events."
The slump's impact was wide-ranging. The third largest stablecoin, Ethena USDe, once lost its peg to the U.S. dollar. Binance, the world's largest digital asset exchange, experienced a technical glitch. According to data tracking agency Coinglass, more than 1.6 million traders were forced to liquidate their positions.
Industry executives are seeking this week to identify exactly which players have suffered the most losses. So far, no evidence of liquidation has been found. However, after the collapse of giant platforms such as FTX in the encryption market, the chain reaction has always been worrying.
Coinglass said in a research report that the interest rate (funding rate) paid by leveraged traders for futures bets has dropped to the lowest level since the FTX collapse in 2022, marking one of the most severe leverage resets in the history of the crypto market.
Crypto market maker Caladan noted in a report that the plunge caused open interest in Bitcoin and Ethereum options to halve to $33 billion and $19 billion respectively. Galvin said this reset would lead to a more robust pricing foundation in the medium term.
Bitcoin hit a new high of $126,251 on October 6 this year and is still up 23% year-to-date. Much of the driving force comes from Trump’s pro-cryptocurrency policies in the United States.