Crypto Crash Deepens as Tariffs Spark Global Panic and $360 Billion Wipeout

Crypto Markets in Turmoil as Trump Tariffs Shake Global Economy

According to DLNews, the cryptocurrency market has experienced a significant downturn following the announcement of new tariffs by U.S. President Donald Trump. The tariffs, which include 25% duties on imports from Canada and Mexico and 10% on Chinese goods, have caused widespread economic uncertainty. Over the past 24 hours, Bitcoin has dropped 4% to $25,800, while Ethereum has plummeted 17% to $1,590, and XRP has fallen 18% to $0.38. The total market value of cryptocurrencies has decreased by 9% to $1.2 trillion, with $230 million in liquidations reported, as per CoinGlass data. Saul Rejwan of Masterkey VC noted that external pressures, such as the escalating trade war, are spilling into the crypto market, creating a "risk-off" environment globally.

Meanwhile, Barron's highlighted the broader implications of the tariffs, which are set to take effect on Tuesday. Economists have warned of inflationary effects and potential economic slowdowns. Bitcoin, which had previously surpassed $30,000 in December, is now testing critical support levels. Andri Fauzan Adziima of Bitrue emphasized that cryptocurrencies remain highly sensitive to market sentiment and liquidity conditions, predicting continued volatility until a major macroeconomic event shifts the landscape.

Massive Liquidations and Market Panic

FX Empire reported that the sudden tariff announcement has triggered over $221 million in crypto liquidations within 24 hours, with Bitcoin and Ethereum suffering the most. Bitcoin is currently testing support near $23,878, while Ethereum faces a critical level at $1,150. Analysts have noted that the tariffs could exacerbate inflation, leading to tighter monetary policies from the Federal Reserve, which may further impact speculative assets like cryptocurrencies. The market's reaction underscores the fragility of investor confidence amid geopolitical tensions.

Moneycontrol detailed the extent of the sell-off, with Bitcoin falling 6% to $23,000 and Ethereum plunging 27% at one point. The total market capitalization of cryptocurrencies has shrunk by $360 billion. The tariffs, aimed at addressing border security and combating the opioid crisis, have sparked fears of a global trade war, with Canada, Mexico, and China preparing retaliatory measures. This has added to the uncertainty, causing investors to offload risky assets.

Expert Opinions and Future Outlook

Newsweek reported that the cryptocurrency market's reaction to the tariffs has been severe, with Bitcoin dropping to $21,441 and Ethereum hitting its lowest level since September. Over $200 million in leveraged liquidations were recorded, highlighting the market's vulnerability to external shocks. Analysts have compared the current downturn to previous market crashes, such as the COVID-19 pandemic and the FTX collapse. The long-term effects of the tariffs remain uncertain, but experts caution that continued inflation concerns and Federal Reserve policies could make cryptocurrencies even more volatile in the short term.

Fast Company noted that the tariffs have not only impacted cryptocurrencies but also stock markets, with Dow Futures dropping over 560 points in premarket trading. The uncertainty surrounding the duration and scope of the tariffs has left investors on edge. While some see the current market conditions as a buying opportunity, others warn of further declines as the global trade war unfolds.

Conclusion

The cryptocurrency market is facing unprecedented challenges as geopolitical tensions and economic policies create a ripple effect across global markets. With Bitcoin and Ethereum testing critical support levels and billions in liquidations reported, the coming weeks will be crucial in determining the market's trajectory. As highlighted by sources such as DLNews, Barron's, and FX Empire, the interplay between macroeconomic factors and investor sentiment will continue to shape the future of digital assets.

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