The crypto market has begun to claw back losses following a sell-off that resulted in one of the worst liquidation events in its history.

On Friday, Bitcoin fell from $121,000 to as low as $109,000 over a seven-hour period, erasing all gains made from an early “Uptober” rally. Ethereum dipped to a low of $3,686 while Solana touched just above $173, CoinGecko data shows.

The volatile trading session triggered a “flash crash of liquidations,” wiping almost $7 billion across all markets within one hour, with $5.5 billion coming from longs, Sean Dawson, head of research at on-chain options platform Dervie, told Decrypt.

When the dust settled, nearly $20 billion in liquidations across all digital assets had been wiped out in a single day on Friday, with $16.7 billion in long positions making up the majority, CoinGlass data shows.

Overall, it marked “the largest single-day wipeout in crypto history,” Dawson said.

Stocks were also hard hit, with the Nasdaq dipping 3.6%, the S&P 500 down 2.7% and the Dow falling 1.9%. 

The sell-off in stocks and crypto followed President Trump’s announcement that he was canceling a planned meeting with Chinese President Xi Jinping and had ordered a “massive increase” in tariffs on Chinese imports—a move he acknowledged could be “potentially painful” for Americans.

Trump’s tariff warning came after Beijing moved to curb exports of rare earths and critical minerals, escalating tensions between the world’s two largest economies. 

By the weekend, China appeared to soften its stance, with analysts suggesting the market rout may have been fueled by a brief geopolitical overreaction.

“What we’re seeing is a textbook relief rally,” Dean Serroni, CEO of crypto investment manager Merkle Tree Capital, told Decrypt.

“Ethereum’s 11% surge is pure short-covering and mean reversion after the market overreacted to Trump’s tariff bombshell,” he said.

Serroni pointed to “thin” selling pressure amid a reset to open interest across derivatives markets after volatility spiked on “overleveraged derivatives traders.”

Bitcoin is up 5% on the day to $115,100 while Ethereum is up 10.5% to $4,138, CoinGecko data shows. Meanwhile, major altcoins including Solana, BNB, and Dogecoin are up 12%, 16.5% and 11.4%, respectively.

“This rout was a geopolitical knee-jerk, not a structural break,” Serroni said.