$450M Vanishes: Crypto Market Hit Hard by U.S. Tariff Shockwaves

Crypto Market Faces Turbulence Amid Tariff Announcements

Recent developments in the cryptocurrency market have highlighted significant volatility, with Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) experiencing sharp price fluctuations. According to CoinDesk, the imposition of U.S. tariffs by President Donald Trump has led to $450 million in crypto futures liquidations within 24 hours. The tariffs include a 25% levy on auto imports and a minimum 10% tariff on all exporters to the U.S., with additional duties targeting major trading partners in Asia and the European Union.

Bitcoin initially surged above $87,000 earlier in the week but later dropped to $83,500, reversing gains made earlier. Similarly, Ethereum and XRP saw declines, trading at $1,800 and $2.15, respectively. The market's reaction to these tariffs has been marked by heightened volatility, with $230 million in liquidations affecting both bullish and bearish positions. BTC futures alone accounted for $172 million in liquidations, followed by ETH futures at $120 million.

"The initial market ‘shock’ may likely spike volatility, but it should be a short-term effect," stated Arthur Azizov, Founder of B2 Ventures, as reported by FXStreet.

Key Takeaways:

Bitcoin dropped from $87,000 to $83,500 following tariff announcements.
$450 million in crypto futures liquidations occurred within 24 hours.
Tariffs include a 25% levy on auto imports and a 10% baseline on other goods.

Altcoins and Market Sentiment

FXStreet reported that the broader cryptocurrency market capitalization fell by 5% following the tariff announcements. Bitcoin declined by 2%, while Ethereum, Solana (SOL), and XRP saw losses of 4%, 4%, and 3%, respectively. The total liquidations in the crypto derivatives market reached $511.77 million, with Bitcoin traders accounting for $179.71 million of this figure.

President Trump's "Make America Wealthy Again" event outlined reciprocal tariffs affecting 185 countries, with Canada and Mexico as exceptions. The tariffs, which range from 10% to 50%, are expected to have far-reaching implications for global trade and financial markets. The S&P 500 also saw a sharp decline of 3.7%, erasing $2 trillion in market capitalization.

Summary:

Global crypto market capitalization dropped by 5%.
Bitcoin traders faced $179.71 million in liquidations.
Tariffs impact 185 countries, with rates up to 50%.

Bitcoin's Potential for Further Liquidations

Bitcoinist highlighted the risk of $9.41 billion in short positions being liquidated if Bitcoin's price reaches $90,000. Analyst Seth shared a heatmap showing significant liquidation volumes concentrated between $80,000 and $90,000. A surge to $87,000 last week already wiped out $77 million in short positions, and further upward momentum could trigger a short squeeze, driving prices even higher.

As of now, Bitcoin is trading at $83,029, with traders closely monitoring the $90,000 mark as a potential psychological barrier. A breakout above this level could lead to increased volatility and forced buybacks from short sellers, further accelerating price gains.

Highlights:

$9.41 billion in shorts at risk if Bitcoin hits $90,000.
Short liquidations could lead to a short squeeze and higher prices.
Bitcoin currently trades at $83,029, up 1.12% in the past 24 hours.

Market Outlook and Institutional Activity

According to FXStreet, institutional interest in Bitcoin remains strong despite recent volatility. Publicly traded companies added 91,781 BTC to their balance sheets in Q1 2025, even as Bitcoin's price fell from $94,400 to $82,400. Meanwhile, Bitcoin ETFs saw $157.8 million in outflows on Tuesday, marking the third consecutive day of withdrawals. Fidelity and Ark Invest led the outflows, while Bitwise's ETF recorded $24.5 million in inflows.

Altcoins like Ethereum and Solana faced significant selling pressure, with $235 million in liquidations reported. The announcement of repayments by the defunct exchange FTX, which holds 99% of its assets on Ethereum and Solana blockchains, has added to the market's uncertainty.

Key Points: