Crypto Market Turmoil: $1.485 Billion Liquidated as Tariffs Spark Sell-Off

In the past 24 hours, the total liquidation across the network surged to $1.485 billion, with over 520,000 people being liquidated. This significant event has raised concerns about the stability of the crypto market and its susceptibility to external factors.

The recent surge in liquidations can be attributed to several factors, including increased geopolitical tensions and economic uncertainty. The announcement of new tariffs by the U.S. on several countries has exacerbated these tensions, leading investors to shift their portfolios away from risk-heavy assets like cryptocurrencies.

The impact of these tariffs on the crypto market has been substantial. Bitcoin and Ethereum, two of the most prominent cryptocurrencies, have experienced significant price declines. Bitcoin fell to $96,300, its lowest in three weeks, while Ethereum plunged roughly to $2,800, erasing gains made since early November.

The crypto market's reaction reflects concerns that tariffs could force the Federal Reserve to maintain higher rates throughout 2025. Inflationary pressure from import costs and supply chain disruptions reduces the likelihood of rate cuts this year, which could impact borrowing across major markets and lead to a risk-off appetite, particularly for crypto.

Trading partners have announced swift retaliation to the U.S. tariffs. Canada imposed matching 25% tariffs on $155 billion of U.S. goods, while Mexico promised countermeasures and China plans a World Trade Organization lawsuit. These retaliatory measures could further exacerbate global trade tensions and negatively impact the crypto market.

While some market observers believe that the reaction to the tariffs is overblown, the crypto market's volatility and susceptibility to external factors remain a concern. As the market continues to evolve, investors and traders must remain vigilant and adapt to the changing landscape.