Trump China tariffs slam crypto for $19 billion in liquidations
Cryptocurrencies plummeted after President Trump announced sweeping 100 % tariffs on Chinese imports and export restrictions on critical software, triggering more than $19 billion in leveraged position liquidations and a rapid drop in BTC prices.
Bitcoin fell 8.4 %, sliding to around $104,782, while the total crypto market lost over 9 %, wiping out an estimated $124 billion in market value. The liquidation wave hit long positions hardest, intensifying volatility across major tokens.
The sell-off followed the tariff announcement, which was widely interpreted by markets as a sharp escalation in the U.S.–China trade war. The surprise measure reversed the momentum that had driven Bitcoin to new all-time highs earlier in the week.
Derivatives markets were hit especially hard. Within the span of an hour, more than $7 billion in leveraged crypto positions were liquidated. Meanwhile, futures open interest had already been surging in recent days, reaching upwards of $90–$95 billion ahead of the crash, indicating heavy institutional participation. Total liqudations volume hit $19 billion.
The sell-off followed the tariff announcement, which was widely interpreted by markets as a sharp escalation in the U.S.–China trade war. The surprise measure reversed the momentum that had driven Bitcoin to new all-time highs earlier in the week.
Derivatives markets were hit especially hard. Within the span of an hour, more than $7 billion in leveraged crypto positions were liquidated. Meanwhile, futures open interest had already been surging in recent days, reaching upwards of $90–$95 billion ahead of the crash, indicating heavy institutional participation. Total liqudations volume hit $19 billion.
Though the liquidation event was intense, it also exposed structural vulnerabilities. The heavy reliance on leverage in derivatives markets magnified downside risk. Analysts emphasize that these liquidations were symptomatic of a broader fragility in highly leveraged positions rather than a failure in the spot market.
Some metric shifts hint at possible stabilization ahead. Open interest across futures contracted slightly in response to the crash, suggesting mild deleveraging rather than wholesale exit. Funding rates on perpetual swaps also eased, indicating reduced pressure from overly bullish positions.
Ethereum and Solana led losses among major altcoins as the crypto market retraced sharply in response to the tariff shock. ETH dropped about 5.8 %, falling to near $3,637, while Solana’s price fell nearly 4–5 % in the same period.
Network data for Solana also showed a sharp divergence: daily transactions on the blockchain have halved over recent months, plunging from approximately 125 million to about 64 million, even as price held up prior to the sell-off.
JPMorgan analysts attributed part of Solana’s decline to skepticism over spot Solana ETFs, projecting modest inflows of about $1.5 billion in their first year — significantly lower than expectations for Ethereum-oriented funds.
Beyond the crypto sector, global markets reacted sharply. The S&P 500 dipped more than 2%, and equities exposed to Chinese demand bore the brunt of the volatility.
The market’s sensitivity to macro shocks is now more acute. What began as a tariff announcement cascaded into a leveraged unwind, underscoring how intertwined crypto markets have become with broader geopolitical and macroeconomic dynamics.
That said, not all signals are bearish. Some traders view the abrupt drawdown and eased derivatives pressure as a clearing event that could set the stage for renewed strength—if fresh capital enters and macro risks recede. Continued global trade escalation or regulatory turbulence could trigger additional volatility.
Some metric shifts hint at possible stabilization ahead. Open interest across futures contracted slightly in response to the crash, suggesting mild deleveraging rather than wholesale exit. Funding rates on perpetual swaps also eased, indicating reduced pressure from overly bullish positions.
Ethereum and Solana led losses among major altcoins as the crypto market retraced sharply in response to the tariff shock. ETH dropped about 5.8 %, falling to near $3,637, while Solana’s price fell nearly 4–5 % in the same period.
Network data for Solana also showed a sharp divergence: daily transactions on the blockchain have halved over recent months, plunging from approximately 125 million to about 64 million, even as price held up prior to the sell-off.
JPMorgan analysts attributed part of Solana’s decline to skepticism over spot Solana ETFs, projecting modest inflows of about $1.5 billion in their first year — significantly lower than expectations for Ethereum-oriented funds.
Beyond the crypto sector, global markets reacted sharply. The S&P 500 dipped more than 2%, and equities exposed to Chinese demand bore the brunt of the volatility.
The market’s sensitivity to macro shocks is now more acute. What began as a tariff announcement cascaded into a leveraged unwind, underscoring how intertwined crypto markets have become with broader geopolitical and macroeconomic dynamics.
That said, not all signals are bearish. Some traders view the abrupt drawdown and eased derivatives pressure as a clearing event that could set the stage for renewed strength—if fresh capital enters and macro risks recede. Continued global trade escalation or regulatory turbulence could trigger additional volatility.
Author
Sebile Fane cut her teeth in blockchain by building tiny NFT experiments with friends in her living room, long before the buzzwords took hold. She’s driven by a curiosity for the human stories behind smart contracts — whether it’s a small-town artist minting her first token or a DAO voting on climate grants — and weaves technical insight with genuine empathy.
