The market crash between late 2025 and early 2026 was primarily triggered by a "liquidity shock" following a series of geopolitical and macroeconomic bombshells. The downturn began in October 2025 when the announcement of a 100% tariff on Chinese imports rattled global risk assets, causing Bitcoin to plummet from its peak of $126,000. This sell-off was intensified by extreme over-leveraging—where traders used borrowed funds at ratios as high as 50x—leading to a massive $19 billion liquidation event. By February 2026, further pressure arrived with the nomination of a hawkish Federal Reserve Chairman, which signaled a shrinking balance sheet and tighter money supply. Historically, these crashes are a recurring part of Bitcoin's "four-year cycle"; for instance, the market saw similar 80% drawdowns in 2014, 2018, and 2022, usually following a period of "irrational exuberance" and parabolic price growth.#BTC