Bitcoin Plunges to $92,000 as Trump’s Tariffs Spark Crypto Market Crash

The cryptocurrency market nosedived on Sunday night following new U.S. trade tariffs imposed by President Donald Trump.

Bitcoin (BTC) briefly traded as low as $92,000 before bouncing back to $99,000, while Ethereum (ETH) plummeted 30% to $2,100 but has since recovered to $2,700.

XRP dropped by 20% to $2.27, while Solana (SOL) declined by 10% to $193 before recovering most of their losses. The overall cryptocurrency market capitalization shrank by nearly 10% in the past 24 hours, dropping to $3.18 trillion.

This sharp decline triggered over $2.3 billion in liquidations, surpassing the levels seen during the COVID-19 market crash and the FTX collapse. However, Bybit co-founder and CEO Ben Zhou suggested that the actual liquidation figure could be up to five times higher.

According to Coinglass data, ETH accounted for approximately $628 million in liquidations over the past 24 hours, while BTC recorded $460 million. Altcoins collectively contributed to $439 million in liquidations.

Trade War Fears

Experts linked the market-wide sell-off to weakened investor sentiment, driven by concerns about potential retaliatory actions from international trading partners in response to Trump’s tariffs. They warned that this could trigger a broader sell-off across both tech and crypto markets.

"Trump announced over the weekend that he would be imposing 10-25% tariffs on Canada and Mexico, and breaking the USMCA trade agreement, which Trump himself hailed at the time,” John Glover, Chief Investment Officer of Ledn, told The Defiant. “As a result of this decision, risk assets sold off across the board.”

Glover noted that Trump’s actions, along with the retaliatory measures announced by Canada and Mexico, will undoubtedly lead to a substantial rise in inflation across North America. He added that this will likely cause job losses on both sides of the border as demand decreases due to higher prices.

Trump’s Tariffs

In a significant escalation of trade tensions, Trump announced the imposition of 25% tariffs on imports from Canada and Mexico, effective Feb. 1. These measures are part of the administration's strategy to address concerns over illegal immigration and drug trafficking.

In response, both Canada and Mexico declared retaliatory tariffs on American goods. Canadian Prime Minister Justin Trudeau announced a 25% tariff on various U.S. products worth $20 billion, set to begin on Tuesday, with additional tariffs on other goods anticipated. Mexico also stated it will impose retaliatory tariffs, though specific details have yet to be disclosed.

“We can play the game all they want,” Trump said in response, according to the AP. He also revealed that he plans to speak with his Canadian and Mexican counterparts on Monday to discuss the situation.