Bitcoin News Today: Echoing 2020's Pandemic Crash, Trump Tariffs Send Crypto Markets Plummet

Trump's announcement of a 100% tariff on Chinese goods triggered a sharp sell-off in the cryptocurrency market, with Bitcoin (BTC) and major altcoins plummeting amid escalating U.S.-China trade tensions. The U.S. president cited China's export controls on rare earth materials as justification, leading to immediate market volatility. Bitcoin dropped below $110,000 from around $117,000 within hours, marking its worst single-day decline of 2025, while Ethereum (ETH) and Solana (SOL) fell 16% and 14%, respectively Coindesk^[1]. The total crypto market capitalization fell over $400 billion, reaching $3.6 trillion, with over $9.4 billion in liquidations reported in the 24 hours following the announcement BeInCrypto^[4].

The tariff threat exacerbated fears of a global trade war, with analysts comparing the market reaction to the 2020 pandemic-induced crash. Prominent traders described the selloff as a "leverage reset," with altcoins experiencing drops of 20%-40% Coindesk^[1]. Ether, XRP, and DOGE fell to multi-month lows, while leveraged long positions accounted for $7.15 billion of the liquidations BeInCrypto^[4]. The impact extended beyond crypto, with U.S. equity indices like the S&P 500 and Nasdaq declining 2% and 2.7%, respectively, as investors shifted to safe-haven assets like gold Bitcoin Magazine^[2].

China's expanded export controls on rare earths, announced days prior, further strained supply chains for semiconductors, AI, and defense technologies. The U.S. responded by canceling a planned Trump-Xi meeting and escalating tariffs, effectively confirming a full-scale trade confrontation. Analysts warned that the combined measures could disrupt global tech supply chains, deepening uncertainty for sectors tied to crypto infrastructure BeInCrypto^[5].

The immediate fallout highlighted crypto's growing sensitivity to macroeconomic and geopolitical events. Liquidation data revealed heavy selling pressure, with over 210,000 traders affected in 24 hours, including a $15.49 million liquidation on Hyperliquid . Short-term volatility is expected to persist through the weekend, with Bitcoin testing key support levels near $110,000. If no new policy announcements emerge, markets may stabilize next week, though further escalations could prolong the downturn .