Crypto Market Sees $450M in Liquidations as Tariff Jitters Shake Sentiment
The crypto market took a sharp turn lower Thursday, reversing recent gains as heightened U.S. trade tensions triggered a wave of volatility across risk assets.
Bitcoin (BTC) and other major cryptocurrencies initially rallied on optimism earlier in the week but retreated swiftly after the U.S. imposed sweeping tariffs, creating a whipsaw effect for traders. In total, over $450 million in leveraged crypto positions were liquidated in the past 24 hours, impacting both bullish and bearish bets.
The market turbulence followed President Donald Trump’s announcement of new tariffs — a 25% duty on imported autos and a baseline 10% tariff on all imports to the U.S. Additional country-specific rates hit major trading partners, with China facing a combined 50% on certain goods and India seeing tariffs as high as 26%.
Equities and crypto markets reacted swiftly. Gains from earlier in the week evaporated across U.S. indices and digital assets, while gold soared to new highs and U.S. Treasury yields dropped to five-month lows in a classic flight-to-safety move.
Bitcoin briefly climbed above $87,000 on Wednesday as traders priced in long-term resilience, with ether (ETH) touching $1,900 and XRP crossing $2.15. Technical indicators pointed to potential bullish continuation — until sentiment flipped.
By Thursday morning in Asia, bitcoin had dropped to around $83,500, with ether retreating to just above $1,800 — wiping out Tuesday’s gains in a matter of hours.
According to Coinglass data, the price swings triggered more than $450 million in liquidations. Bitcoin futures alone saw $172 million in forced closures, while ether contributed $120 million. Altcoins collectively added another $50 million to the total.
Liquidations occur when traders holding leveraged positions can’t meet margin requirements, prompting exchanges to close their positions. These events often reflect moments of heightened uncertainty — and in this case, mirrored the broader market’s unease.
While single-sided liquidations can signal a local top or bottom, Thursday’s balanced flush points to a market still searching for direction amid geopolitical and macroeconomic headwinds.
