Question #112 ·
How did tensions between the US and China lead to over $19 billion in crypto market liquidations?
- Regulatory approval delays for new tokens prompted traders to offload holdings.
- Cyberattack rumors on major exchanges led investors to panic and sell.
- Trade dispute fears sparked sharp Bitcoin selloffs causing forced margin liquidations. Right answer
Why is this the correct answer?
This is correct because fears of worsening US-China trade relations led many investors to sell Bitcoin quickly. When traders use borrowed funds (margin), a rapid price drop triggers automatic liquidation of positions. That mechanism amplified losses and caused over nineteen billion dollars in crypto liquidations on October 15. Beginners should note that margin trading increases both potential gains and potential forced losses.