"Trader's $16M Ethereum Short: Crypto's $2B Bloodbath Amidst Trade War Fears"

An Ethereum trader has reaped a windfall of nearly $16 million by betting on the cryptocurrency's price decline. The trader opened a 50x leveraged short position when ETH was trading at $3,388, profiting as the price dropped to $3,107 on February 2. This strategy, known as leveraged shorting, involves borrowing and selling assets at high prices, then buying them back at lower prices.

Ethereum's price has been on a six-week losing streak, falling more than 10% in the last 24 hours to hit a low of $2,326.97. Unfortunately, ETH did not manage to stay above the critical $3,000 level. A push beyond this level could have triggered $1 billion in short liquidations, according to Cointelegraph.

The trader's success comes amidst a broader market downturn, with over $2.24 billion wiped out in just 24 hours. Ethereum took the hardest hit, falling below $3,000 and causing over $600 million in liquidations. This massive sell-off was triggered by growing global tensions surrounding President Trump’s new trade tariffs, which have rattled investor confidence.

Analysts are warning that if the economic and political problems continue, Ethereum and other cryptocurrencies could drop further. Investors are now looking to see if Bitcoin and Ethereum can hold critical support levels, or if the market will see more downward movement.

The real culprit behind the downtrend is the ongoing trade war between the U.S. and other countries. The U.S. recently imposed a 25% tariff on goods from Canada and Mexico, and a 10% tariff on Chinese products. In response, Canada imposed tariffs on U.S. goods. President Trump is also considering tariffs on the European Union and BRICS nations if they create their currency.

These trade tensions are causing fears of inflation, delaying interest rate cuts, and increasing economic uncertainty. Investors had hoped for a positive market rally, but instead, they’re seeing a sharp decline.

The impact of this massive sell-off was felt the most on major crypto exchanges like Binance, which accounted for 36.8% of the liquidations. Other exchanges like OKX, Bybit, and