Bitcoin (BTC) fell below the $78,000 mark on Sunday, trading at $77,840, reflecting a 6% drop as investors react to significant volatility in the broader financial markets. This decline follows the worst drop in US equities since 2020, triggered by President Donald Trump's announcement of restrictive global tariffs.
The leading cryptocurrency, which traded above $80,000 for most of the year, is now down 28% from its all-time high (ATH) of $109,000 in January, which was also curiously boosted by Trump's election victory last November.
Trump's tariffs trigger $247 million in bitcoin liquidation
Bitcoin is usually traded in tandem with major technology stocks and is seen by many traders as a leading indicator of market sentiment. Interestingly, last week bitcoin held steady between $82,000 and $83,000 even as stocks and gold tumbled.
However, CNBC attributes President Donald Trump's recent announcement of the tariffs to a shift in investor sentiment, causing a wave of selling in the crypto market affecting the largest cryptocurrencies.
The tariffs, which apply to all imports and include additional duties on major trading partners, have raised fears of a potential global trade war. This uncertainty has prompted investors to abandon riskier assets, including cryptocurrencies.
In the wake of these developments affecting the entire crypto ecosystem, the leading cryptocurrency has suffered over $247 million in long liquidations in just 24 hours since Saturday, with Ethereum (ETH) facing $217 million in similar liquidations over the same time period.
Cryptocurrency's big drop amid global trade war fears
Over the weekend, as fears of further market carnage emerged, investors rushed to sell their cryptocurrency holdings. The anxiety surrounding Trump's tariffs not only affected bitcoin, but also reverberated throughout the cryptocurrency ecosystem, with other Solana (SOL) coins suffering declines of approximately 12%.
The consequences of the announcement of the tariffs were felt in global financial markets. As a result of the news, the S&P Global Broad Market Index recorded a staggering loss of $7.46 trillion in market value, with the US stock market alone losing $5.87 trillion. The losses extended beyond the US markets as other major global markets declined by $1.59 trillion.
As bitcoin continues to mirror broader market trends, it is now seeing a decline of 15% in 2025. Analysts suggest that in the absence of any significant crypto-specific catalysts, bitcoin will likely continue to move in tandem with equities, overshadowed by fears of a global recession.
These economic uncertainties present a challenging environment for cryptocurrencies, which were initially expected to benefit from favorable regulatory developments this year.
