Crypto Market Crashes 2% as U.S. Tariffs Trigger $490M Liquidations

The crypto market experienced a significant crash today, primarily driven by the announcement of new U.S. tariffs, mass liquidations, and a wave of market-wide fear. The tariffs, which included a minimum 10% duty on all imports with higher rates for key partners, sent shockwaves through both traditional and digital markets. Bitcoin and Ethereum prices plummeted sharply, with Bitcoin dropping from $88,500 to $83,500 and Ethereum falling from $1,934 to under $1,800. The total crypto market cap slipped by 2%, settling near $2.68 trillion during the mid-Eastern trading session on the 3rd of April. This sharp reaction underscores the sensitivity of crypto to global macroeconomic shocks, as the tariffs disrupted global trade and directly impacted digital assets.

The price plunge led to over $490 million in leveraged positions being liquidated, affecting more than 160,000 traders. The largest single liquidation occurred on a major exchange, where an ETH/USDT position worth $12 million was closed. Bitcoin futures accounted for $170 million in liquidations, while Ethereum contracts lost $120 million. Smaller altcoins contributed an additional $50 million to the total. Interestingly, volatility impacted both market directions, with $257 million coming from liquidated long positions and $232 million from shorts. This downturn punished both bullish and bearish traders.

Market sentiment shifted sharply into fear as traders assessed the impact of the tariffs. Initially, there was a brief wave of optimism, but this quickly dissipated. Markets analyst reported a 46% surge in trading volume, driven by large players adjusting their positions. Retail traders, however, remained mostly cautious. The Crypto Fear & Greed Index dropped to 24, indicating heightened fear across the market. Just a week ago, sentiment was closer to neutral. This sharp shift in investor outlook highlights the market's sensitivity to significant policy changes.

The heavy sell-off in the stock market also fueled crypto losses. The S&P 500 futures shed $2 trillion in market capitalization within just 15 minutes of the announcement. Major tech stocks, including apple, amazon, and nvidia, experienced significant losses. This broad sell-off spilled over into cryptocurrency markets, as both sectors declined in unison. The panic in traditional finance magnified the crypto crash, with the shock being both immediate and closely tied to widespread economic fears.

Conclusively, the crypto market crash today was caused directly by U.S. trade tariff announcements. These sparked fear, triggered mass liquidations, and aligned with a global equity sell-off. Therefore, clear geopolitical policy—not rumors—was the root cause of the crash. The market's reaction to the tariffs underscores the interconnectedness of global financial markets and the vulnerability of digital assets to macroeconomic events. As the dust settles, investors will be closely watching for further policy developments and their potential impact on the crypto landscape.