"Crypto Crash: XRP, DOGE Plummet 25% as Trade War Fears Surge"

Cryptocurrency markets experienced a significant downturn on Monday, with XRP and Dogecoin (DOGE) leading the decline, falling by more than 25%. This sharp drop erased all gains made since December and brought prices back to levels seen before the U.S. election in early November. The overall market capitalization fell by 12%, marking the worst decline in over a year, while the CoinDesk 20 (CD20) index lost 10%. Bitcoin (BTC) also dropped by 6%.

The sell-off was triggered by a new wave of tariffs imposed by the U.S. on Canada and Mexico over the weekend, sparking fears of a global trade war and souring sentiment for risk assets. Futures markets reflected these losses, with traders of ether (ETH)-tracked products losing over $600 million in the past 24 hours. XRP and DOGE bets lost a cumulative $150 million, while altcoin-tracked products lost $138 million and ether-tracked futures lost $84 million. Total liquidations crossed $2.2 billion, the highest this year and among the biggest such levels in the past year.

Analysts cautioned of further losses as the week progressed, with Augustine Fan, head of insights at SignalPlus, noting that Ethereum's decline was particularly concerning as it behaved like an altcoin on the downside without the benefit of long-term institutional inflows or near-term catalysts. Massive long futures liquidation was observed over the weekend, with over $2 billion in futures stop outs, marking the sharpest liquidation event in crypto history. Markets were expected to be in a full risk-off mode as the U.S. equity market opened.

The market correction stems from a trade war that U.S. President Donald Trump has seemingly ignited with 25% tariffs being placed on Canada and Mexico. The move has caused immediate disruptions in North American trade relations, with both countries threatening retaliatory tariffs. Financial markets are concerned about the potential for increased costs on goods, impacting industries from automotive to agriculture. The interconnected economies of these nations suggest that this tariff imposition could lead to a broader economic slowdown, threatening jobs and raising costs for consumers.