The cryptocurrency market experienced massive losses, including Ether, Cardano, Avalanche, XRP, and Dogecoin. The fall came after former US President Donald Trump imposed taxes on goods from China, Canada, and Mexico. Within 24 hours, leading altcoins fell by more than 20%, causing shockwaves throughout the digital asset industry.
Ether, the second-largest cryptocurrency, fell 16% in a single hour, reaching a low of $2,368 before recovering somewhat to $2,521. However, it is still much lower than its 2024 peak of $4,078. Other cryptocurrencies, including Avalanche, Chainlink, and Dogecoin, also experienced significant losses, leading to an 11.4% reduction in overall crypto market capitalization, which fell to $3.17 trillion.
Market observers attribute the sudden drop to a combination of panic selling and stop-loss orders. Markus Thielen, founder of 10x Research, said that decreased trading volumes in recent weeks indicated a lack of investor confidence, leaving the market exposed to unexpected shocks. Due to their focus on other industry developments, many traders failed to fully consider the impact of the tariff.
Traditional markets also felt the impact of the tariff news, with Nasdaq 100 futures plunging 2.7% and the S&P 500 plummeting 2%. This anxiety spilled over into the cryptocurrency sector, sending the Crypto Fear & Greed Index to the “Fear” zone with a score of 44, its lowest level since October.
Meanwhile, Bitcoin remained rather stable, falling only 6.8% to $94,743. This increased Bitcoin’s market dominance from 61.1% to 64%, as cautious investors transferred their holdings from altcoins to the more stable digital asset.
Adding to the chaos, the market had over $2.24 billion in liquidations in 24 hours, affecting over 730,000 dealers. Binance executed the largest single liquidation order, worth $25.6 million, in the ETH/BTC trading pair. The majority of these liquidations—more than 84%—came from traders with long positions, indicating that many had been betting on a prolonged market upswing before the abrupt plunge.
Despite Trump’s past pro-crypto position, his newest tariff policies have created new uncertainty in the industry. Deepening trade wars and economic concerns have lowered investor sentiment, creating fears of long-term volatility. Analysts believe that the development of global economic conditions in the coming weeks will largely determine the market’s path.
