Bitcoin and other cryptocurrencies saw a sharp drop on Wednesday, giving up most of their gains from the day before. The market pullback came after reports that the Trump administration is thinking about increasing restrictions on tech exports to China. This move is seen as a reaction to China’s recent limits on rare-earth metals, which are critical for high-tech manufacturing.

On Tuesday, crypto prices had jumped after Federal Reserve Governor Christopher Waller made positive comments about digital assets. But that optimism was short-lived. By Wednesday, Bitcoin (BTC) fell back to around $108,000, losing nearly all of its 5% gain from the previous day when it briefly touched $114,000.

Ethereum (ETH) also declined, dropping more than 5% in 24 hours to about $3,839. Other major cryptocurrencies like Solana (SOL), Binance Coin (BNB), and XRP were also in the red, with losses ranging between 1% and 6%.

According to blockchain analytics firm Glassnode, long-term Bitcoin holders have started selling more of their coins. Since October 15, about 28,000 BTC moved out of long-term wallets. This suggests that seasoned investors are distributing their holdings more aggressively instead of just holding onto them.

QCP Capital analysts noted that while tensions between the U.S. and China are still high, there’s mixed messaging. Some officials are still discussing new tariffs, but others are talking about possible trade deals. They also pointed out that the Federal Reserve’s key upcoming data point will be the September inflation numbers (CPI), which are set to be released Friday, October 24. Other economic reports are delayed due to the ongoing government shutdown.

In terms of crypto market movers, ChainOpera AI (COAI) stood out with a massive 42% gain, while MemeCore (M) saw a 5.6% increase. On the flip side, ASTER and Mantle (MNT) were the biggest losers of the day, falling by 15% and 10%, respectively.

Trading activity was intense. Data from Coinglass shows over $619 million in leveraged crypto positions were liquidated in just 24 hours. Of that, $472 million were long positions (bets on prices going up) and $147 million were shorts (bets on prices going down). Bitcoin alone accounted for $210 million in liquidations, followed by $157 million in Ethereum and $51 million in Ethena’s ENA token.

Despite the market dip, spot crypto ETFs saw strong inflows on Tuesday, October 21. Ethereum spot ETFs brought in over $141.6 million, while Bitcoin spot ETFs added more than $477 million. This pushed total net assets in spot Bitcoin ETFs past $151 billion.

The broader financial markets were also hit by the U.S.-China news. The Dow Jones Industrial Average slipped by 0.6%, the S&P 500 dropped 0.8%, and the Nasdaq lost 1.4%. These declines added more pressure to an already shaky crypto market.

Keywords: Bitcoin price drop, Ethereum decline, crypto market news, Trump China trade war, rare-earth metals, crypto liquidation, leveraged positions, crypto ETF inflows, Glassnode data, QCP Capital update, long-term Bitcoin holders, tech export restrictions.