Over the past day, the world crypto market has dipped dramatically and investors are trying to catch their breath after the market meltdown fueled by DeepSeek AI and the recent Bank of Japan interest rate hike that happened earlier this week.
For example, Bitcoin and Ethereum have decreased in value by 6 and 8 percent constantly within a week’s timeframe.
Once again, exogenous factors have proven to be detrimental to both the stock market and cryptocurrency and in particular after the abrupt, recent decision by ex president Donald Trump to start charging tariffs on Canada, Mexico and China.
This caused a crypto market cap carnage within the globe dipping by over 3 percent from 3.49 to 3.35 trillion US dollars amounts erasing more than 140 billion dollars in less than 24 hours.
Moreover, the fear and Greed Index with regard to cryptocurrency has started moving from greed upwards to 47, which is neutral. This clearly indicates that there is a continuing descent in trust of the investments out there and an increase in negative sentiment.
Bitcoin Price and Crypto Market Downfall Due to Trump Tariffs
The President of the United States, Donald Trump has exercised the 1977 International Emergency Economic Powers Act (IEEPA) para 1 by declaring a national emergency premised on immigration and fentanyl issues. This allows him to impose a 10% tariff on China goods and a 25% tariff on imports from Mexico and Canada.
These circumstances led Bitcoin and other cryptocurrencies to decline as fears of trade wars and inflationary prices for US citizens came into play. US PCE inflations were also made public on Friday which suggested the inflation rate has increased for three straight months while important US stock indices ended the week in the negative.
Economists are concerned about the effects of tariffs imposed on primary trading countries on the US economy because this can result in more inflation while compounding the cost of living, unemployment, and inflationary recessions. This has created reprisals from Canada, Mexico and China now making this a trade war.
Crypto Market Sees $700 Million in Liquidations
As per Coinglass information, in just the past day, there were more than 250,000 traders liquidated in the crypto market, losing over $700 million. The maximum liquidation that took place was valued at $11.84 million, where an ETHUSDT position was liquidated on Binance.
On the HTX exchange, during last Monday’s market crash, the largest single liquidation occurred when a BTCUSDT position fuevalued at $98.46 million.
In total, long term positions liquidated amounted to $520 million, while $80 million came from the short position. Popular assests such as BTC, ETH, SOL, DOWE, XRP, TRUMP, and RUNE dominated the stocks.
Although, the aim was to make a profit of around $350 million, having lost a lot of money in the long positions because the market dropped too steeply in just 12 hours.
Due to the uncertainty regarding tariff negotiations, crypto trader Skew predicts a temporary disarray within the market. He labels the tariffs as “bluffing” which indicates that after some response from countries like Canada, the tariffs may not stay at the same proportions.
There has also been an unprecedented increase in the short positions, opposing the US stocks. Reports from Goldman Sachs show that hedge funds are hoping for a recession in the stock market, especially with these tariff actions from president Trump. So this shift has risen concerns in the financial world.
With the demand for Bitcoin ETFs and institutional investment spending putting too much pressure on the crypto market, Ethereum experienced a resort to more than 5% and hit the figure of $3,069, while Bitcoin dropped to a low of $99,122. In addition, top altcoins like XRP, SOL, DOGE, ADA, and LINK have also faced losses of more than 5% within the 24 hours prior.
Experts Predict Crypto Market Correction
According to Skew, a crypto trader, the market is facing a “short-term turmoil” because of the volatility surrounding tariffs. Skew also states that this situation is ‘bluffing’, since countries such as Canada may retaliate with counter tariffs, rendering the current rates ineffectual.
Goldman Sachs has published data hinting at cryptocurrencies’ susceptibility to fluctuations due to increases in Bitcoin ETFs. The numbers are making financial markets jittery and worsening
The situation is that hedge funds are wagering aggressively that Trump’s tariffs would cause a crash in American stocks. The most alarming indication, however, is soaring short position against U.S. stocks algorithms.
Bitcoin was clocking at $99,022, representing an alarming 24-hour low while Ethereum fell over 5% to $3,069. Major altcoins like XRP, DOGE, ADA, and SOL saw their values drop over 5% as well.
In contrast, the Dollar Index grew stronger as DXY climbed to 108.50 and the 10-year Treasury yield rose beyond 4.54%, signaling stronger markets. Bitcoin generally demonstrates a pattern of responding inversely to these values.
If Bitcoin’s price dips below the $95K mark, it could lead to a major selloff. For this reason, a lot of traders remain cautious because a double-top pattern has recently formed on the daily chart.
