Major cryptocurrencies experienced a sharp selloff during Asian trading hours on Monday as markets grappled with escalating global trade tensions following President Trump’s sweeping tariff announcements. The market turbulence has triggered massive liquidations and sparked concerns about broader economic implications.
Market Impact
Bitcoin, the leading cryptocurrency, stabilized around $93,900 by Hong Kong afternoon trading after dropping as low as $93,100 in the morning session, representing an 8% decline. The selloff has been particularly severe across the broader crypto ecosystem:
Ethereum (ETH) plummeted nearly 20%, trading below $2,500
Solana (SOL) declined 7% to $193
XRP suffered a 23% drop, trading at $2
The CoinDesk 20 index, tracking major digital assets, fell 17%
Liquidation Wave
The market downturn triggered a significant wave of forced liquidations, with CoinGlass data revealing approximately $1.3 billion in long positions wiped out over a 12-hour period:
$400 million in Ethereum long positions liquidated
$300 million in Bitcoin long positions cleared
Remaining liquidations spread across other cryptocurrencies
Trump-Related Assets Hit Hard
Projects and tokens associated with the Trump ecosystem have not been spared from the market turmoil:
The TRUMP memecoin dropped 12%
World Liberty Financial (WLFI), backed by the Trump family, saw its January crypto investments decline by 20% according to SpotOnChain data
Trade War Escalation
The market correction comes in direct response to President Trump’s implementation of substantial tariffs:
25% tariffs on Canadian and Mexican imports
Potential expansion to include European Union nations
The United Kingdom appears to be the only nation potentially exempt, with Trump indicating a deal could be “worked out”
Global Response
The international reaction has been swift and negative:
The European Union has promised a firm response to any tariffs affecting member states
A Wall Street Journal editorial board dubbed it the “Dumbest Trade War in History”
Brussels warned about unnecessary economic disruption and inflationary pressures
Trump dismissed critics on Truth Social, suggesting Chinese influence behind the criticism
Market Outlook
The crypto market’s severe reaction to trade war concerns highlights the increasing correlation between digital assets and traditional market risks. As global tensions escalate and retaliatory measures loom, market participants are closely monitoring several key factors:
Potential retaliatory measures from affected nations
Impact on global trade flows and economic growth
Inflationary pressures from tariffs
Further policy responses from major economies
The situation remains fluid as markets digest these developments and assess their potential long-term implications for both traditional and crypto markets.
Also Read: Bitcoin Drops Below $100,000 After Trump’s Tariff News
