Bitcoin faces a massive crash as the cryptocurrency market experiences a significant decline due to the escalating trade war led by Donald Trump’s latest tariffs, massive long liquidations, and other factors.
Bitcoin today has dropped below $77,000, as investors prepare for more financial market volatility after U.S. equities suffered their worst decline since 2020, when the rollout of President Donald Trump’s restrictive global tariffs.
According to Coin Metrics, the price of bitcoin was approximately 4% lower at $76,221, after trading above $80,000 this year, barring a couple of brief hiccups below it amid recent volatility. It’s indeed off its January all-time high by close to 30%.
Cryptocurrency Sentiment Hurt by Trump’s Tariff
Undoubtedly, there is an increase in global trade tension happening in the heart of the current cryptocurrency market decline
- Firstly, as of March 25, the US federal government announced the imposition of 25% tariffs on auto imports and other goods from Mexico, Canada, and China starting April 3.
- However, these protectionist measures have again rekindled concerns of a slowdown in the global economy. Therefore weighing on market sentiment across asset classes.
- For instance, the S&P 500 has declined by approximately 1.85% since the announcement was made.
- St. Louis Fed President Alberto Musalem warned that there would be an increase in fear of inflation. This is because the tariff will raise consumers’ prices on key goods.
- Higher rates are leading to lower rate cut bets happening in the futures market. Futures had a 25 basis point rate of odds (currently decreased to 58% compared to 62.50% a week ago).
Short Liquidation Overpowered By Long Liquidation In the cryptocurrency Market crash
Additionally, Ether, the second-largest cryptocurrency by market cap, is facing over $43 million in long liquidations. This is about a total of $51.76 million currently. Bitcoin, which makes up over 61% of the total cryptocurrency market cap, has witnessed $62.45 million in net liquidations. This was in the past 24 hours, and a total of $48.94 million was identified as long positions. Hence, the total cryptocurrency market liquidations come in at $257.35 million in the last 24 hours, of which $198.11 million are longs.
Rattles In the Market
This sudden mishap has caused most long-holders of BTC, ETH, and some top cryptocurrencies to go into anticipation. All import duties, customs tariffs for main trading partners, inclusive, have triggered fear of a possible global trade war that could lead to recession in the U.S. More concerns about the extensive impact of the tariffs sent markets stumbling worldwide.
