Trump's Tariff Shockwaves Trigger Crypto Market Chaos with Billions Liquidated

Trump's Tariff Hikes Shake the Crypto Market

According to FXStreet, the cryptocurrency market faced a significant downturn as Bitcoin's price dropped below $95,500 on Monday, marking a nearly 5% decline from the previous week. The market lost $2.26 billion in value, largely attributed to U.S. President Donald Trump's tariffs on major trading partners such as China, Canada, and Mexico. Nick Forster, Founder of Derive.xyz, explained that these tariffs are likely to increase inflation, which could negatively impact investor sentiment in the crypto sector. Additionally, Bitcoin's price reached a low of $91,231 during the early Asian trading session, triggering over $2.26 billion in liquidations, including $416 million in Bitcoin alone, as reported by CoinGlass.

Forster further noted that inflationary pressures might prompt the Federal Reserve to maintain or raise interest rates, creating less favorable conditions for digital assets. Derive's options market currently estimates a 22% chance of Bitcoin reaching $75,000 in the near term, while there is an 11% probability of it falling below $65,000 by late June. Meanwhile, data from Santiment suggests that investor enthusiasm for buying Bitcoin at current prices has waned, with fewer discussions about targets like $110,000–$120,000.

Ethereum Faces Steep Decline Amid Market Turmoil

Investing.com reported that Ethereum, the second-largest cryptocurrency by market value, experienced a sharp drop following the announcement of new tariffs by President Trump. The asset's price fell by over 15% in 24 hours, with a trading volume of $91.47 billion. Analysts highlighted that Ethereum's significant role in decentralized finance markets contributed to its steep decline. Ran Yi, Co-Founder of Orderly Network, emphasized that macroeconomic policies, such as tariffs, influence liquidity and risk appetite in the crypto market. Despite the short-term volatility, Yi believes that the long-term trajectory of digital assets remains driven by broader structural trends.

Ethereum's price action has raised concerns among traders, with many forced to unwind leveraged positions. The asset's bearish outlook could push its price toward lower support levels if selling pressure persists. However, analysts remain optimistic about a potential recovery if Ethereum manages to stabilize and regain momentum in the coming weeks.

Ripple and Altcoins Struggle Amid Market Downturn

Coinpedia Fintech News highlighted the struggles of Ripple (XRP) and other altcoins during the recent market downturn. XRP's price dropped over 15% in 24 hours, with a 20.89% decline over the past week. The EMA 50/200-day indicators suggest a bearish trend, with the MACD showing a significant rise in the red histogram. Analysts predict that XRP could retest its high of $3 if market conditions improve, but sustained bearish action might pull its price toward $2.

Similarly, Ethereum's price has been under pressure, with a 17.11% decline over the past week. The Relative Strength Index (RSI) indicates oversold conditions, while the SMA suggests increased selling pressure. If Ethereum maintains its price above $2,530, it could recover to $3,200. However, a bearish sentiment could drive its price down to $2,200.

Bitcoin's Potential Rebound Despite Liquidations

Crypto.news reported that Bitcoin's price dropped to $91,170 on Monday, marking a 16% decline from its yearly high. The crash was attributed to concerns over stagflation risks and the impact of Trump's tariffs. The Federal Reserve's potential decision to maintain higher interest rates could further affect risky assets like Bitcoin. Daily liquidations reached nearly $400 million, the highest in weeks, according to CoinGlass.

Despite the downturn, analysts see potential for a rebound. Historical data shows that Bitcoin often ends the week positively after a Monday drop. Additionally, February has historically been a strong month for Bitcoin, with average returns of 14% since 2013. If trade negotiations begin, the market could see renewed optimism, potentially driving Bitcoin's price back toward its year-to-date high of $109,200.

Sources: