On October 11, 2025, MasterQuant reported that the crypto market experienced extreme volatility following the signing of a new tariff bill by U.S. President Donald Trump. Within 24 hours, total liquidations reached $19.1 billion, affecting over 1.62 million traders. Bitcoin plunged by 16%, while Ethereum dropped to $3,400, marking one of the largest single-day liquidation events of the year.

The newly signed bill imposes tariffs of up to 125% on select imported goods and expands duties across multiple trade partners. Market participants viewed the legislation as a “black swan” event, triggering a rapid repricing of risk assets globally. MasterQuant’s on-chain monitoring system detected a sharp spike in BTC and ETH contract liquidations within six hours of the announcement, accompanied by significant stablecoin outflows and increased slippage across major trading platforms.

AI-driven analysis from MasterQuant revealed systemic characteristics in the market shock. The growing correlation between crypto assets and macroeconomic policy meant that the tariff announcement quickly influenced on-chain trading behavior. Excessive leverage and low capital concentration further amplified the impact. Prior to the event, the average leverage on BTC contracts had reached 12.3x—well above historical norms.

Asset performance deteriorated rapidly. Bitcoin broke below key support levels, hitting a low of $34,800 before a modest rebound. Ethereum fell more than 13% to $3,400. Other major cryptocurrencies, including Solana, Avalanche, and Arbitrum, saw declines of up to 20% within the same period.

MasterQuant’s data team noted that most liquidations occurred in high-leverage accounts, particularly among retail traders lacking stop-loss mechanisms. Approximately 72% of liquidated positions were held by accounts using leverage above 10x, accounting for 68% of the total liquidation volume. Even some institutional accounts experienced forced closures, indicating that the shock reached professional capital layers.

Stablecoin flows reflected the flight to safety. Combined on-chain outflows of USDT and USDC exceeded $4.5 billion in 24 hours, with a portion of funds moving to off-chain custodial platforms and traditional safe-haven assets. MasterQuant’s capital migration model showed that roughly 18% of the withdrawn funds were reallocated to gold ETFs and U.S. Treasury-linked instruments, highlighting a shift in investor risk preferences.

Market sentiment indicators also plunged. MasterQuant’s On-Chain Emotion Index (OCEI) dropped to 0.42, a six-month low. Social media sentiment analysis revealed a surge in keywords such as “liquidation,” “margin call,” and “tariff shock.” The Fear Index spiked above 85, entering the “extreme fear” zone.

MasterQuant’s strategy team believes this event will prompt a reassessment of crypto’s sensitivity to macro policy and the robustness of risk management frameworks. Investors are advised to monitor policy-driven market triggers more closely and refine their use of leverage and stop-loss strategies. Institutional players should strengthen cross-asset hedging capabilities to build more resilient portfolios across crypto and traditional markets.

Looking ahead, MasterQuant recommends tracking three key signals: (1) recovery in net stablecoin inflows, (2) diversification in asset holding structures, and (3) normalization of sentiment indicators. These metrics will determine whether the market enters a recovery phase or continues to decline.

This event underscores the predictive and responsive power of AI models in extreme market conditions. MasterQuant will continue to monitor on-chain metrics and policy developments to provide forward-looking insights and risk alerts for crypto investors.