Bitcoin drops as Trump’s global tariff shock hits crypto markets
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Bitcoin fell sharply early Thursday, dropping over 6% intraday to reach a session low of $82,277 before rebounding modestly to $83,400. The selloff was triggered by widespread risk aversion across financial markets following the confirmation of sweeping U.S. trade tariffs announced by President Donald Trump on April 2. The total cryptocurrency market capitalization slid to a three-week low of $2.74 trillion, down 4% over a matter of hours, with nearly $150 billion exiting spot markets. According to CoinGlass, more than 170,000 traders were liquidated across derivatives markets, with total liquidations exceeding $500 million.
Trump’s “Liberation Day” initiative has introduced one of the most aggressive trade measures in modern history. A universal 10% tariff is now set to be imposed on all imports beginning April 5, with country-specific levies layered on top: China faces a 34% duty, Vietnam 46%, the European Union 20%, and Japan 24%. The cumulative effect of these tariffs has created an environment of acute uncertainty, driving traders to unwind positions across both traditional and digital asset markets.
The S&P 500 futures market erased approximately $2 trillion in value within minutes of the announcement, and crypto assets were not spared. Bitcoin, which has been range-bound in recent weeks, broke lower from the upper end of its channel, heightening concerns about further downside in the short term. Analysts caution, however, that similar drawdowns occurred during previous bull markets and should not be taken as definitive bear market signals. Historical precedent includes a 32% correction in 2024 that extended over six months before BTC resumed its uptrend to new all-time highs.
Altcoins bore the brunt of the latest market downturn. Ethereum briefly dipped below $1,800, XRP tested the $2 level, Binance Coin traded under $600, and Solana slipped beneath $120. The broader rotation out of risk assets has highlighted the heightened correlation between macroeconomic policy and crypto price action.
While volatility may remain elevated in the coming sessions, market participants will closely monitor the macro backdrop, including further policy responses and potential retaliatory trade actions from impacted economies. Until there is clarity on the economic fallout of Trump’s tariff policy, caution is likely to prevail across crypto markets.
Trump’s “Liberation Day” initiative has introduced one of the most aggressive trade measures in modern history. A universal 10% tariff is now set to be imposed on all imports beginning April 5, with country-specific levies layered on top: China faces a 34% duty, Vietnam 46%, the European Union 20%, and Japan 24%. The cumulative effect of these tariffs has created an environment of acute uncertainty, driving traders to unwind positions across both traditional and digital asset markets.
The S&P 500 futures market erased approximately $2 trillion in value within minutes of the announcement, and crypto assets were not spared. Bitcoin, which has been range-bound in recent weeks, broke lower from the upper end of its channel, heightening concerns about further downside in the short term. Analysts caution, however, that similar drawdowns occurred during previous bull markets and should not be taken as definitive bear market signals. Historical precedent includes a 32% correction in 2024 that extended over six months before BTC resumed its uptrend to new all-time highs.
Altcoins bore the brunt of the latest market downturn. Ethereum briefly dipped below $1,800, XRP tested the $2 level, Binance Coin traded under $600, and Solana slipped beneath $120. The broader rotation out of risk assets has highlighted the heightened correlation between macroeconomic policy and crypto price action.
While volatility may remain elevated in the coming sessions, market participants will closely monitor the macro backdrop, including further policy responses and potential retaliatory trade actions from impacted economies. Until there is clarity on the economic fallout of Trump’s tariff policy, caution is likely to prevail across crypto markets.