The recent announcement of sweeping tariffs by U.S. President Donald Trump has sent shockwaves through the cryptocurrency market, resulting in significant losses. Bitcoin and Ethereum, the two largest digital assets, saw sharp declines in value, with Bitcoin dropping from $88,500 to $83,500 and Ethereum falling from $1,934 to under $1,800.
The total cryptocurrency market cap also took a hit, slipping by 2% to around $2.68 trillion. This drop occurred during the mid-Eastern trading session on April 3rd, highlighting the market’s sensitivity to global macroeconomic events.
The impact of the tariffs was further exacerbated by a wave of liquidations, wiping out over 160,000 traders and totaling over $490 million in losses. Most of these liquidations were of leveraged positions, with long traders bearing the brunt of the losses.
Market sentiment quickly shifted from optimism to fear, with the Crypto Fear & Greed Index dropping to 24, indicating heightened fear across the market. Large players adjusting their positions drove a 46% surge in trading volume, while retail traders remained cautious.
The sell-off in the cryptocurrency market was also fueled by heavy losses in the stock market, with the S&P 500 futures shedding $2 trillion in market capitalization within just 15 minutes of the tariff announcement. Major tech stocks such as Apple, Amazon, and Nvidia also experienced significant losses, further contributing to the downward momentum in crypto prices.
Overall, the crypto market crash was directly caused by the U.S. trade tariff announcements, sparking fear, triggering mass liquidations, and aligning with a global equity sell-off. This clear geopolitical policy shift, rather than rumors or speculation, was the root cause of the market downturn.
In conclusion, the impact of global events on the cryptocurrency market cannot be underestimated, and traders and investors must remain vigilant and adapt to changing geopolitical dynamics to mitigate risks and protect their investments.