Bitcoin News Today: Trump's Tariff Push Aims to Cut Deficit, Instead Sparks Crypto Chaos

Trump's recent threats to reimpose tariffs on imports from Canada, Mexico, and China triggered a wave of leveraged liquidations in the cryptocurrency market, with over $1.4 billion in losses reported across major exchanges. The sell-off followed President Donald Trump's announcement that tariffs on Canadian and Mexican goods would resume in early March 2025, ending a monthlong pause. The 25% tariff, affecting over $900 billion in U.S. imports, including automobiles and agricultural products, exacerbated market volatility Crypto Briefing^[1].

Bitcoin and Ethereum prices plummeted in response. Bitcoin fell below $95,000, a multi-week low, while Ethereum dropped 11% to $2,500. The broader crypto market lost approximately 8% of its total capitalization, with $880 million in long positions liquidated within 24 hours. Ethereum traders bore $255 million in losses, and Bitcoin traders faced $185 million in liquidations, according to Coinglass data Crypto Briefing^[1]. Altcoins also suffered, with XRP, SOL, and DOGE declining by double digits Crypto Briefing^[1].

Separate reports highlighted further market instability. A 24-hour liquidation event linked to Trump's tariffs reached $486.55 million, with the largest single liquidation exceeding $11.97 million on Binance's ETHUSDT pair. Exchange inflows spiked as investors moved assets to liquidate positions, with Bitcoin transactions surging and Ethereum deposits hitting hourly peaks of 80,000 ETH Crypto News^[3]. The derivatives market reflected bearish sentiment, with Bitcoin open interest dropping from 334,000 BTC to 304,000 BTC, signaling traders closing long positions to avoid losses Crypto News^[3].

The impact extended beyond crypto. U.S. stock indices fell sharply, with the Nasdaq down 1.77%, as investors reacted to Trump's broader trade policy. The administration's "Liberation Day" tariffs, imposing a baseline 10% tax on all imports, intensified fears of inflationary pressures and supply chain disruptions Crypto News^[3].

Analysts noted that the market turmoil was driven by heightened uncertainty. Bitcoin's Bull Score Index, a key sentiment indicator, fell to 20, its lowest since January 2023, reflecting prolonged bearish conditions Crypto News^[3]. CryptoQuant analysts warned that lower open interest in a declining market often signals liquidations or profit-taking, reinforcing downward momentum Crypto News^[3].

The liquidation wave underscores the sensitivity of crypto markets to macroeconomic policy shifts. Trump's tariff strategy, aimed at addressing trade imbalances and boosting domestic manufacturing, has instead heightened volatility. While the administration claims the tariffs will reduce the federal deficit and create jobs, critics argue they risk triggering retaliatory measures from trade partners, further destabilizing global markets Crypto Briefing^[1].

As the market digests these developments, traders remain cautious. With leveraged positions still vulnerable and open interest elevated, any additional policy announcements or geopolitical shifts could amplify volatility. The coming weeks will test whether the crypto market can stabilize or if further liquidations lie ahead.