Cryptocurrency Market Faces Major Drop Amid Tariff Threats
New York (CNN) — Cryptocurrencies suffered a sharp decline on Friday, resulting in significant financial losses for investors as market volatility heightened.
Traders reacted to President Donald Trump’s threats of new tariffs on Chinese imports, leading to a widespread sell-off in high-risk assets, including cryptocurrencies and tech stocks. The Nasdaq Composite dropped 3.56%, while Bitcoin fell from approximately $122,500 to a low of $104,600, a drop of 15%. Ethereum also experienced a substantial decrease, falling by 20%.
According to CoinGlass, the market saw a record $19 billion in liquidated positions, impacting around 1.6 million traders. “The aggressive crypto selloff was sparked by a risk-off stampede,” said Lukman Otunuga, senior market analyst at FXTM.
Highly speculative coins were hit particularly hard, with Dogecoin dropping over 50%, and Trump’s $TRUMP coin decreasing roughly 63% at its lowest.
The situation worsened due to many traders using leverage, which increased exposure to losses during the rapid price decline. Samir Kerbage, CIO at Hashdex, noted that “Friday’s move was a textbook example of how leverage can amplify short-term volatility.”
Additional concerns arose from potential technical issues, including a stablecoin becoming unpegged from the US dollar on Binance, a major crypto exchange. The exchange confirmed minor technical glitches contributed to the market fluctuations.
As of Monday, Bitcoin stabilized around $115,000, although it has not fully recovered from Friday’s lows. Investors continue to express uncertainty about the market’s future trajectory.