U.S. President Donald Trump’s recent comments about imposing a massive increase in tariffs on Chinese imports have rattled the crypto market. In a Truth Social post, Trump accused China of becoming hostile and attempting to monopolize rare earth exports. His remarks triggered a swift reaction, with Bitcoin plunging below the $120,000 support level after trading just above $121,000 prior to the announcement.
Altcoins Follow Bitcoin’s Downward Spiral
The broader crypto market mirrored Bitcoin’s decline. Ethereum dropped below $4,200, losing over 3 percent in a single day. Other major altcoins including Solana, XRP, and Dogecoin also saw losses exceeding 2 percent. The sell-off reflects investor anxiety over renewed trade tensions and macroeconomic uncertainty, which tend to impact high-risk assets like cryptocurrencies.
Liquidations Surge Amid Market Volatility
According to CoinGlass, over $420 million in long positions were liquidated within an hour of Trump’s statement. Bitcoin and Ethereum accounted for $73 million and $175 million of those liquidations, respectively. Over the past 24 hours, total liquidations reached $895 million, with $723 million in longs and $172 million in shorts. Bitcoin had already been struggling to break above $125,000 before the tariff threat intensified selling pressure.
Whales Sell, Institutions Buy the Dip
Veteran Bitcoin holders, or OG whales, have been offloading their holdings into recent all-time highs. This behavior has historically preceded major pullbacks. Despite this, institutional investors continue to accumulate during dips. Bitcoin ETFs saw $3.24 billion in inflows last week, marking their second-largest weekly intake ever.
Frequently Asked Questions (FAQs)
- What caused Bitcoin’s sudden drop?
President Trump’s threat to increase tariffs on China triggered fears of a renewed trade war, prompting a sell-off in crypto markets.
- How much was liquidated in the crypto market?
Over $895 million in positions were liquidated in 24 hours, with $420 million occurring within the first hour.
- Are institutions still buying Bitcoin?
Yes, institutional investors are accumulating during dips, as shown by record inflows into Bitcoin ETFs.
