The cryptocurrency market faced a massive crash, with over $2.2 billion in liquidations as Bitcoin dropped to $91,000 and Ethereum plunged 20% in 24 hours. The sudden decline wiped out leveraged traders, making it one of the worst single-day liquidation events in crypto history.
Trump’s Tariffs Spark Panic Sell-Off
Traders betting on higher prices saw their positions forcefully liquidated after U.S. President Donald Trump imposed new tariffs on Canada, Mexico, and China. The unexpected policy move triggered a wave of panic selling across digital assets, surpassing even the collapses of Terra (LUNA) and FTX in terms of liquidation volume.
According to CoinGlass, futures traders bore the brunt of the downturn, with $1.87 billion in long positions liquidated compared to $345 million in short positions as of February 3. The widespread leverage in the system caused a cascading effect, accelerating the price decline across major cryptocurrencies.
Ethereum and Bitcoin Lead the Losses
Ethereum suffered the biggest blow, with $600 million in liquidations and a price drop to $2,500, marking a 20% loss in just one day. Bitcoin followed with $400 million in liquidations, briefly dipping to $91,200 before recovering slightly to $93,600, still posting a 6.5% decline.
Altcoins experienced even steeper losses. Tokens in the top 100 saw declines ranging from 15% to 30% in just 24 hours. Memecoin DOGE fell 23% to $0.2313, while XRP lost 21.6% and Solana dropped 6%.
Market Sentiment Remains Fragile
“The crypto market remains on a knife’s edge amid global policies and changing investor sentiments. The slip of Bitcoin below $100,000 is a quest for resilience, with key support levels at $95,000 and $90,000,” said Avinash Shekhar, Co-Founder & CEO of Pi42.
Shekhar emphasized the role of macroeconomic factors in digital asset performance, stating that confidence among investors is crucial for recovery. “A pullback above $100,000 could add momentum again, but a cautious approach is necessary. Crypto markets thrive on volatility; a bearish market today could set the stage for bullish signals tomorrow,” he added.
Global Economic Impact on Crypto
The crash followed Trump’s announcement of new tariffs, imposing 25% levies on Canadian and Mexican imports and 10% on goods from China. Canada and Mexico, the top two U.S. trading partners, vowed immediate retaliatory measures. China also announced plans to challenge the tariffs at the World Trade Organization.
With investor uncertainty at a high, the next few days will determine whether the market stabilizes or faces further declines. For now, traders are bracing for continued volatility in the wake of the historic liquidation event.
