Bitcoin Plunges Below $105K : What Really Triggered the Flash Crash?

The Sudden Drop
In a dramatic turn of events, Bitcoin’s price plunged over 8% within a single hour, dropping from the $121,000 range to just above $105,000 before partially recovering. The move wiped out billions in market capitalization and sent shockwaves across the entire crypto ecosystem. Traders on major exchanges watched in disbelief as liquidation alerts flooded social media and price charts turned blood-red — marking one of the most volatile trading hours of 2025 so far.

The Trigger: Tariff Turmoil
The immediate spark appears to be a major geopolitical announcement from U.S. President Donald Trump, who declared 100% tariffs on all Chinese imports in a televised statement earlier today. The announcement rattled global markets, pushing investors to unwind risky positions. While equities and commodities fell sharply, Bitcoin — often considered a hedge against traditional finance — reacted violently, suggesting that leveraged traders were heavily exposed when the shock hit.

 
Liquidations and Cascading Losses
According to data from Coinglass and CoinMarketCap, over $2.5 billion in leveraged long positions were liquidated within minutes as the price began to tumble. These automatic sell-offs created a cascading effect, amplifying downward momentum as traders were forced to close positions at a loss. Analysts describe this as a classic “liquidation cascade,” where leverage acts as fuel for volatility. The flash-crash pattern has been observed multiple times in crypto history, but rarely with such speed and magnitude.

 
Whales and Panic Selling
Blockchain trackers also detected a surge in large Bitcoin transfers to exchanges, often a precursor to mass selling. Some observers speculate that institutional whales took advantage of thin weekend liquidity to trigger a correction and accumulate BTC at lower prices. Meanwhile, retail investors, fearing a deeper plunge, rushed to sell, intensifying the panic. Social media platforms were quickly flooded with hashtags like #BitcoinCrash and #BTCdump, reflecting the mood of uncertainty gripping the market.

 
What Comes Next?
Despite the chaos, veteran traders urge calm. Bitcoin’s fundamentals remain strong — with nearly 95% of total supply already in circulation and institutional adoption at record levels. Historical data shows that sharp corrections often precede major rallies, as weak hands exit and liquidity resets. Whether this marks the start of a prolonged downturn or simply another violent shakeout in Bitcoin’s long-term bull market remains to be seen. For now, all eyes are on how the market digests this latest macro shock in the days ahead.