The crypto market has taken a massive hit after new import tariffs imposed by U.S. President Donald Trump triggered a widespread sell-off. More than $1.7 billion in long and short positions were liquidated, marking the largest liquidation day of the year.
Market Crash Fueled by Trade War
According to Coinglass data, over 450,000 traders were liquidated in the past 24 hours.
- $1.57 billion in long positions was wiped out.
- $219 million in short positions also faced liquidation.
This selling pressure emerged after Trump announced new trade tariffs on imports from Canada, Mexico, and China.
“The U.S. government announced on Saturday new 25% tariffs on goods from Canada and Mexico, along with 10% tariffs on Chinese products,” said Min Jung, a research analyst at Presto Research.
These measures have sparked fears of rising inflation and prolonged high interest rates, which heavily impacted risk assets like cryptocurrencies.
Bitcoin and Altcoins in Freefall
The impact on crypto prices was immediate and severe.
- Bitcoin (BTC) dropped by 7.5%, falling below $91,000.
- Ethereum (ETH) briefly crashed below $2,200.
- The total crypto market capitalization shrank by 13.7%, landing at $3.12 trillion.
Major altcoins also suffered substantial losses:
- Ripple (XRP) plunged by 28.2% to $2.10.
- Dogecoin (DOGE) lost 26.9% of its value, dropping to $0.23.
- The GMCI 30 Index, which tracks the performance of the 30 largest crypto assets, fell by 24.3%.
Analysts warn that the consequences of these trade tariffs could linger.
“Investors fear that inflation caused by these tariffs will force the Federal Reserve to keep interest rates higher for longer than previously expected,” said Hank Huang, CEO of Kronos Research.
This could intensify downward pressure on crypto assets in the coming months.
Earlier this year, Donald Trump was seen as a major catalyst for optimism in the crypto sector. However, his latest economic policies appear to be having the opposite effect.
What Happens Next?
Crypto market volatility is expected to persist. Analysts emphasize that further trade war escalations or new Federal Reserve policies could have lasting effects on the sector.
For now, the market must recover from this major setback—but one thing is certain: crypto market turbulence is far from over.
- Why the Massive Bitcoin Outflow from Exchanges Is Good News - February 7, 2025
- Bitcoin Price Analysis – Key Levels, Market Structure & Trading Scenarios - February 5, 2025
- $1.7 Billion in Crypto Liquidations: Trump’s Trade War Throws Markets into Chaos - February 3, 2025