rewrite this title Trump’s new tariffs caused $2 billion in liquidations

Bitcoin tumbled during Asian trading hours, hitting a one-month low of $92,000 due to President Donald Trump’s aggressive trade tariffs.

This sharp drop triggered one of the largest liquidation events in the last year.

Red market

According to CryptoSlate’s data, BTC’s downturn began on Jan. 31 when it slipped from over $105,000 to $102,000 within hours.

The decline continued through the weekend, pushing BTC below $100,000 and dragging the broader market down.

Market data shows most altcoins faced similar struggles. Ethereum fell nearly 20%, finding support just above the $2,500 mark.

On the other hand, Solana dropped 10%, landing at $195. XRP declined 17% to $2.3 while other major assets, including Dogecoin and Cardano, lost around 20% each.

This price performance effectively wiped out the gains these assets made during the post-Trump election victory rally in December 2024.

BitMEX’s co-founder Arthur Hayes cautioned that more losses could follow. Hayes suggested that relief may only come if a major financial institution faces a crisis, prompting the US Federal Reserve to intervene with liquidity measures.

He wrote:

“The beatings shall continue until moral improves. The pain stops when a TradFi outfit is on the verge of bankruptcy. Then the Fed reluctantly joins team Trump and prints that money.”

Trump tariff

Analysts at Singapore-based trading firm QCP noted that President Donald Trump’s newly imposed tariffs on major trading partners, including Mexico, Canada, and China, triggered the broad market sell-off.

Also, the firm pointed out that the market rut was spread across the board as “equities sank across regions, gold dipped, oil spiked, and crypto sold off violently.” It added:

“This decorrelation reinforces the view that today’s risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event.”

On Feb. 1, the US president introduced a 25% duty on imports from Canada and Mexico, alongside a 10% tariff on Chinese products. His administration claims the tariffs aim to address illegal immigration and drug trafficking.

The tariffs sparked immediate retaliation, with Canada, Mexico, and China responding with countermeasures threats.

Liquidation galore

The sharp downturn in the crypto market led to widespread liquidations, wiping out over $2 billion and affecting more than 742,000 traders, as per CoinGlass data.

Traders with long positions—who anticipated price gains—suffered the heaviest losses, collectively losing around $1.88 billion. Those holding short positions, expecting further declines, faced losses of about $379 million.

Ethereum traders suffered the most, with total liquidations hitting $611 million, of which $447 million came from long positions. Bitcoin followed closely, with $411 million in liquidations, including $340 million from long bets.

Traders betting on other assets also lost $439 million during the reporting period.

Meanwhile, the largest single liquidation occurred on Binance, where a $25 million Ethereum trade was completely wiped out.

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