Cryptocurrencies continued their downward trajectory following a weekend of historic liquidations that triggered massive sell-offs across the market.

During early London trading on Tuesday, Bitcoin (BTC-USD), the largest digital asset by market capitalization, extended losses by as much as 3.75% to approximately $111,500, according to data compiled by Bloomberg. Ethereum (ETH-USD) declined 7.5%, falling below the $4,000 threshold. Smaller, more volatile tokens posted even steeper losses, resulting in the total market capitalization of all cryptocurrencies shrinking by over $150 billion within 24 hours, according to CoinGecko data.

The cryptocurrency decline coincides with China's implementation of restrictions on the U.S. subsidiary of Hanwha Ocean Co. (042660.KS), one of South Korea's largest shipbuilding companies. This represents China's retaliation against U.S. measures targeting the Chinese shipping industry. Following President Donald Trump's threats of more severe tariffs in response to China's new export control measures, the cryptocurrency market initiated a brutal sell-off starting October 10, with approximately $19 billion in leveraged cryptocurrency positions being liquidated.

On Monday, digital asset markets briefly rebounded and recovered some lost ground, but most mainstream tokens have resumed their downward trend.

The weekend sell-off represented a dramatic reset for the cryptocurrency market. On Monday, investors withdrew $756 million from U.S. Bitcoin and Tether exchange-traded funds (ETFs), highlighting the nervous sentiment among traders.

Data analytics firm Glassnode stated in a report: "The market is currently entering a consolidation phase, characterized by renewed market caution, selective risk appetite, and confidence in both spot and derivatives markets being rebuilt at a more measured pace."