US President Donald Trump’s recent declaration of imposing a 50% tariff on importations from the European Union pummeled the cryptocurrency market extensively. The declaration, which takes effect on June 1, made Bitcoin and other altcoins go through extreme price corrections, wiping out over $100 billion in market capitalization.
Impact on Bitcoin and Altcoins
Following Trump’s tariff revelation, the price of Bitcoin plummeted from $111,000 to approximately $108,000. The whole cryptocurrency market fell by 4% in 24 hours. Bitcoin later rebounded somewhat to approximately $109,000 but is under pressure owing to extended market volatility. According to sources, the combined market capitalization of the cryptocurrencies fell to as low as $3.53 trillion below levels.
Liquidations and Market Responses Following Trump’s EU Tariff Threat
Coinglass data showed that the crypto market lost approximately $64 million in liquidations within four hours following the news. Of this, $34 million were long positions and $30 million short positions. Volatility affected altcoins majorly, with most of them losing a double-digit figure. Ethereum dropped over 5%, while other cryptos like Solana and XRP dropped quite significantly.
Geopolitical Fears and Market Volatility
Experts say that Trump’s tariffs have the potential to introduce more economic uncertainty. US-EU trade tensions uncertainty has increased, and investors are wagering on potential geopolitical surprises. In reports, 162,419 traders were closed within the last 24 hours worth $567.65 million in losses. Such a scenario means that the crypto market has no hedge against the policy shifts across the world.
The Future of Crypto Amid Trade Tensions
While these releases are responded to by the crypto market, the traders are holding out for any response from the EU or additional releases from the Trump administration. The long-short ratio for Bitcoin remains nearly even, which means a confusion in the market’s direction. This confusion can be interpreted as more volatility in the next couple of days. While investors move to navigate the course through this volatile terrain, attention will lie in the manner in which trade tensions continue to fuel market forces.
