Crypto Market Witnesses over $2.2B Liquidation Amidst Bearish Sentiment

This past weekend the cryptocurrency market suffered a significant crash. Bitcoin dropped by 7.3% settling at $93,800 while Ethereum fell by 20% coming down to $2,500. Analysts think that the sell off can be attributed to the escalating tensions from the trade war. President Donald Trump raised tariffs by 25% on Canadian and Mexican imports and imposed 10% duties on Chinese goods. Fears of a global economic slowdown spread causing major panic in the financial markets.

Trade War Escalation Fuels Market Uncertainty

China, together with Canada and Mexico ,retaliated by imposing counter tariffs, and also promised to sue the U.S. at the World Trade Organization (WTO). These countermeasures worsened market uncertainty which caused investors to liquidate their funds from riskier assets like cryptocurrencies.

Amidst the panic in the crypto space, Bitcoin’s dominance reached 61.5% highlighting how investors chose the leading cryptocurrency over the heavy losses other altcoins sustained. Ethereum futures saw $600 million in liquidations adding up to over  in losses throughout the market. This event is known as the largest single-day liquidation event in crypto history.

Altcoins Take the Hardest Hit

Memecoins and smaller altcoins experienced the worst losses. Dogecoin (DOGE) crashed 22%, while Trump’s official meme token dropped 30%. Meanwhile, Solana-based assets fell between 13% and 38%, reflecting the severity of the market downturn.

Analysts warned that if Bitcoin fails to hold the $95,000 support level, it could slide further to $85,000. Ethereum also entered oversold territory, with its Relative Strength Index (RSI) hitting extreme lows. The next key support for Ethereum sits at $2,359, a level traders are watching closely.

What’s Next? A Divided Outlook on Bitcoin’s Future

The volatility in the Bitcoin market has left investors shaken. Tariffs, according to Jeff Park, could help Bitcoin in the long run because it may be perceived as a hedge against inflation. At the same time, Nic Puckrin states that Bitcoin is still a risk asset and stock market declines will continue to push BTC lower. 

Adding to this argument is Robert Kiyosaki’s estimate of a market crash in February. He encourages investors to ‘buy the dip.’ This discouraging claim is further amplified by VanEck analysts who suggest that Bitcoin price may reach anywhere between $160,000 and $180,000 by the end of 2025.

Traders are now tasked with the extremely challenging job of constructing a crypto pricing model based on the level of geopolitical strain. As governments slowly begin intervening in global trade, self-reliant tactics and risk control become paramount.