Bitcoin. Credit: Pexels, David McBee
Bitcoin and the wider cryptocurrency market took a sharp dive over the weekend following U.S. President Donald Trump’s decision to impose hefty import tariffs on Canada, Mexico, and China.
The decision reignited fears of a global trade war and reportedly triggered a panic sell-off in digital assets, leading to over $2.2 billion in liquidations – marking one of the worst days for crypto markets since the FTX collapse.
The sell-off began on Saturday night (February 1), shortly after Trump signed an executive order imposing 25 per cent tariffs on imports from Canada and Mexico and 10 per cent tariffs on Chinese goods.
Bitcoin and Ethereum crashing
Bitcoin tumbled by 7 per cent to a low of $91,200, before rebounding slightly to $93,768, according to Coin Metrics. The world’s largest cryptocurrency (Bitcoin) is now 16 per cent off its all-time high of $109,350, recorded on January 20.
Ethereum, the second-largest digital asset, saw an even more dramatic drop, plunging 20 per cent to $2,500, its lowest level since November. Other major altcoins suffered 15-30 per cent declines, amplifying the market-wide panic.
Record-breaking liquidations
The rapid decline led to one of the largest liquidation events in crypto history. According to CoinGlass, traders betting on a price increase suffered massive losses including $1.87 billion in long positions wiped out, $345 million in short positions liquidated, $600 million in Ethereum liquidations, and $400 million in Bitcoin liquidations.
The scale of the crash even surpassed the FTX and LUNA collapses, with analysts calling it the worst altcoin sell-off since the Covid crash.
Investors are now closely watching Bitcoin’s $90,000 support level. If it fails, analysts warn that the cryptocurrency could see a deeper pullback towards $80,000.
Despite the brutal sell-off, seasoned crypto investors are taking it in stride, noting that 30 per cent corrections are common during bull markets. Some traders see the downturn as an opportunity to buy at discounted prices, while others warn that market conditions remain fragile.
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