Bitcoin Reaches New All-Time High, but Cryptocurrency Market Faces Sharp Correction Following US-China Trade Conflict News: In-Depth Review and Analysis of the Top 10 Cryptocurrencies of the Week
The cryptocurrency market experienced dramatic fluctuations this week: the leading digital currency, Bitcoin, soared to a new record high but faced a sharp correction as the weekend approached, influenced by global news. Investors watched as altcoins initially followed Bitcoin's rise but then experienced increased volatility. Let’s take a closer look at the key events of the week in the cryptocurrency market and the positions of the top ten most popular digital assets.
Bitcoin Hits New Price Peak
In the first half of the week, Bitcoin (BTC) reached its historical price record, surpassing the mark of $125,000 for the first time. The rise of the leading cryptocurrency was driven by sustained demand from institutional investors and overall positive market dynamics. Since the beginning of the year, Bitcoin has strengthened by more than 30%, reflecting growing investor confidence in digital assets. Experts note that favorable regulatory signals from the US and a weakening of the US dollar prompted some major players to diversify their capital towards Bitcoin.
Sharp Correction and Market Volatility
Following the impressive rally came equally rapid upheavals. In the second half of the week, the cryptocurrency market faced a sharp sell-off. The trigger was a sudden external economic factor: the announcement by the US administration of 100% tariffs on all imports from China, reviving fears of a new trade war. The news immediately dampened appetite for riskier assets, and cryptocurrencies were no exception. Within a day, the market experienced record liquidations totaling around $19 billion. Bitcoin's price plummeted from record highs above $125,000 to levels below $105,000 during the peak of panic selling, before partially recovering to around $110–115,000. Nevertheless, the flagship asset lost about 8% in a day. This "tariff shock" demonstrated that volatility remains an inherent feature of the cryptocurrency market, even with the growing participation of large institutional players.
Altcoins: Rally and Subsequent Turbulence
Alternative cryptocurrencies (“altcoins”) also showed confident growth at the beginning of the week, partly due to the capital influx effect following Bitcoin's records. Ethereum (ETH) rose to around $4,700 – close to historic highs – amid high interest in decentralized finance (DeFi) and expectations of further development of the network. Solana (SOL) made a rapid leap to $238, reflecting an influx of funds into high-performance blockchain projects and NFT platforms. The total cryptocurrency market capitalization exceeded $4.3 trillion on October 7.
However, the swift rally was followed by an equally sharp correction, affecting almost all leading altcoins. Ethereum fell more than 12% in one day, briefly dropping to support near $4,000. Solana lost about 40% from its highs, plunging to $144 at one point before it began to recover. XRP dropped approximately 22%, and the popular meme token Dogecoin (DOGE) lost about 21%. Mass profit-taking and flight from risky assets led to a nearly $560 billion reduction in total cryptocurrency market capitalization in a single day, down to $3.74 trillion. This turbulence underscores that altcoins can rise faster than the market, but their declines are often deeper in light of a general market downturn.
Institutional Demand and Record Inflows into ETFs
One of the key drivers of growth has been the active participation of large investors. In the first week of October, US spot Bitcoin ETFs attracted more than $5 billion, bringing total assets of cryptocurrency funds to over $160 billion. The largest among them, the BlackRock iShares Bitcoin Trust, has almost reached $100 billion in assets amid record inflows.
Traditional financial institutions continue to integrate cryptocurrencies. For the first time, Morgan Stanley recommended that clients allocate 2–4% of their investment portfolios to Bitcoin and digital assets, recognizing Bitcoin as "digital gold." Notably, one of the European sovereign funds announced its investment of approximately 1% of reserves in Bitcoin through ETFs—the first such decision in the European Union. These moves affirm the growing trust of major players in digital assets.
Geopolitical and Macroeconomic Factors
Recent events have shown how sensitive the cryptocurrency market has become to external macroeconomic factors. The threat of escalating a trade conflict between the US and China immediately impacted investor sentiment, placing cryptocurrencies alongside other risky assets reacting to global news.
Additionally, market sentiment was influenced by budget uncertainty in the US: the government shutdown at the beginning of October forced regulators to postpone consideration of new crypto ETFs, delaying the launch of anticipated investment products. On the other hand, positive signals emerged in Europe: the UK regulator, FCA, lifted a long-standing ban on the sale of crypto-ETNs to retail investors, expanding access to digital assets. These mixed signals highlight the global nature of the cryptocurrency market: actions by authorities in different countries are increasingly reflected in the dynamics of digital assets.
Top 10 Most Popular Cryptocurrencies: Weekly Summary
Despite sharp fluctuations, leading cryptocurrencies maintain positions in the top ten by market capitalization. Below is a brief overview of the dynamics and events of the week concerning the top 10 digital currencies:
- Bitcoin (BTC): established a new all-time high (~$125,000) and concludes the week around $115,000 after the correction. It dominates the market with a share of approximately 55% and remains the main benchmark for investors.
- Ethereum (ETH): approached record values (~$4,700) due to rising DeFi activity, but receded to ~$4,000 during the sell-off. Maintains its status as the leading smart contract platform and the second-largest cryptocurrency by market cap.
- Tether (USDT): the largest stablecoin pegged to the US dollar. During periods of volatility, it served as a "safe haven" for traders, firmly maintaining the $1 peg. The market capitalization of USDT exceeds $80 billion.
- Binance Coin (BNB): the exchange's own token and its blockchain ecosystem. During the market surge, it gained about 20%, briefly rising to nearly $1,200, but subsequently fell below $1,000 due to overall correction. BNB remains the largest exchange crypto token.
- XRP (Ripple): the token associated with the Ripple payment platform. Prior to the correction, it showed gradual growth, then lost about 22% in a day. Despite the volatility, XRP remains in the top five, largely due to its use in cross-border payments.
- USD Coin (USDC): the second most significant stablecoin backed by the dollar. Like USDT, it maintained a firm peg to $1 during market turmoil and remains one of the key trading and DeFi instruments.
- Cardano (ADA): one of the leading smart contract platforms. At the peak of the rally, ADA showed growth, benefiting from the overall capital influx into altcoins, but then corrected. The project continues to develop, sustaining long-term investor interest.
- Dogecoin (DOGE): the most capitalized "meme cryptocurrency." In the first half of the week, it rose with the market; however, high speculation led to a ~21% decline during panic selling. DOGE remains in the top ten thanks to its loyal community.
- Solana (SOL): a rapidly growing blockchain for decentralized applications. SOL spiked to $238 amid interest in high-speed networks but then retreated below $150 due to profit-taking. Despite the correction, Solana remains in the top ten due to an actively growing DeFi and NFT ecosystem.
- TRON (TRX): a blockchain platform known for its active use in the stablecoin and decentralized application spheres. TRX showed relative stability amid overall turbulence. Active use of the TRON network for stablecoins (USDT) helps the coin remain in the top ten.
Investor Sentiment and Outlook
The cryptocurrency market combines recent record optimism with an awareness of risks. Many analysts are optimistic about the end of the year: if external factors do not escalate, Bitcoin could resume its growth following a consolidation phase. Predictions are being made for reaching marks of $130–140,000.
However, the recent correction has tempered enthusiasm, reminding investors of the high volatility. Institutional players continue to enter the market, but they are acting cautiously, considering the actions of regulators and the macroeconomic environment. Many participants anticipate the onset of an "altcoin season”—a period when, after Bitcoin stabilizes, capital flows into altcoins. The long-term trend for the industry remains upward: cryptocurrencies are increasingly integrating into the financial system, and more investors perceive them as a legitimate asset class. It is important to diversify portfolios and closely monitor news to be prepared for both new highs and potential pullbacks.
