Crypto Market Absorbs Tariff Pressure as Market Structure Shows Signs of Recovery

TLDR:

• Crypto markets absorbed repeated tariff escalations in 2025, unlike the mass liquidations seen in October 2024.
  
• October’s crash was driven by overleveraged positioning and thin liquidity, not solely by the tariff headlines alone.
  
• Analysts note forced sellers have largely exited, leaving a cleaner and less one-sided market structure today.
  
• Price reaction to negative news, not the news itself, remains the strongest signal for gauging crypto market health.

The crypto market is responding differently to macroeconomic pressure compared to months prior. Analysts and traders are noticing a sharp contrast in price behavior.

Where escalating tariff headlines once triggered mass liquidations, buyers are now stepping in instead. This shift in market reaction is drawing attention from seasoned observers who track positioning and market structure over narrative-driven explanations.

October’s Flush Versus Today’s Absorption

The crypto market experienced a violent downturn around October 10th. Tariff news hit, and the reaction was immediate and brutal.

Mass liquidations swept through exchanges, and prices dropped sharply. The explanation at the time seemed straightforward — tariffs broke crypto, and that was that.

Analyst Justin Wu pointed this out in a recent post on X. He noted, “Back on October 10th the entire timeline agreed on one thing: Tariffs just broke crypto.”

The difference today, however, tells another story. Tariff escalation continues, yet the crypto market is absorbing the pressure without cascading lower.

Wu attributed October’s severity to the market structure at that time, not the news itself. Leverage was elevated, long positions were overcrowded, and liquidity was thin. Those conditions made the market fragile before any catalyst even arrived.

Once that unwind started, it fed on itself. Liquidations triggered more liquidations, bids disappeared, and the narrative became the explanation rather than the actual cause.

Positioning Has Quietly Shifted Below the Surface

The crypto market today appears to be operating from a cleaner base. Forced sellers from the October episode are largely gone. Leverage has cooled across major exchanges, and positioning is far less one-sided than before.

Wu noted that stronger buyers are now willing to step in where panic once ruled. This is typical behavior following a proper cleanup phase in any asset class. The market stops reacting to bad news the same way once the weak hands have exited.

Negative headlines are still hitting the tape regularly. However, price action is no longer following the same script. That kind of divergence between news and reaction is often a leading signal worth watching closely.

Wu wrapped his analysis with a clear point of focus. He wrote, “Most people focus on the story. The better signal is always the reaction.”

The crypto market reaction right now is notably different from what it was during the October flush. Whether this leads to a sustained move higher remains to be seen.

Still, the structural condition of the market today appears more stable. Traders tracking positioning rather than headlines are finding a more measured picture beneath the surface noise.