Bitcoin, Ethereum Tumble With $1.34B in Crypto Liquidations on Tariff Worries

The crypto market took a sharp downturn on Tuesday following US President Donald Trump’s reaffirmation that the planned tariff on Mexico and Canada will proceed as planned starting March 4.

The announcement, made during a White House press conference, confirmed that the administration will move forward with a 25% levy on goods from both nations and a 10% tariff on Canadian energy resources, including oil, natural gas and electricity.

These looming tariffs have heightened investor anxiety over global trade stability, prompting a wave of de-risking in financial markets. The crypto sector was no exception, seeing a 9% decline, with Bitcoin falling below $90,000. Ethereum plunged 10% to $2,409.

President Donald Trump said he expects tariffs planned to take effect on Canada and Mexico to go ahead next month https://t.co/J9eQSwIMLZ

— Bloomberg Asia (@BloombergAsia) February 24, 2025

Crypto Faces Pressure From Global Risks, Not Just Tariff Tensions

James Toledano, chief operating officer at Unity Wallet, commented on the shift in sentiment, noting that many had expected Bitcoin’s price to surge following Trump’s inauguration.

However, he pointed out several factors contributing to market hesitation. These include tariff tensions, ongoing instability in Eastern Europe, and concerns about AI-driven disruptions in the US tech sector. Additionally, upcoming elections in Germany have added to the uncertainty.

“This could also just be a momentary lapse of pricing reason,” he said.

Over 362,000 Traders Liquidated as Market Volatility Surges

Further compounding market instability, CoinGlass data revealed that 362,485 traders were liquidated in the past 24 hours, resulting in $1.34b in total liquidations. Of this, long positions accounted for $1.24b, while $97.9m came from short positions.

Bitcoin ($524.05m) and Ethereum ($292.30m) saw the largest liquidations, followed by Solana ($111.9m), XRP ($56.6m) and Dogecoin ($28.7m). The turbulence reflects a combination of macroeconomic uncertainty and panic-driven selling, intensifying liquidation events across leveraged positions.

Did liquidity in crypto just dry up?

Crypto markets have now erased -$325 BILLION of market cap since Friday morning.

At 5:00 PM ET today, crypto lost -$100 billion in 1 HOUR without any major headlines.

What is happening with crypto? Let us explain.

(a thread) pic.twitter.com/6jJSu8U9gj

— The Kobeissi Letter (@KobeissiLetter) February 25, 2025

Adding to the market’s instability, a major security breach at crypto exchange Bybit has further dented sentiment. A reported $1.4b was drained from a single Ethereum wallet, shaking investor confidence and accelerating sell-offs across multiple assets.

Investor sentiment has notably soured amid these developments. The Crypto Fear & Greed Index, which measures overall market sentiment on a scale of 0 to 100, fell to 25 points on Feb. 25, signaling ‘Extreme Fear’ among traders. The drop suggests that uncertainty over tariffs, security risks, and global economic headwinds has triggered risk-averse behavior, further pressuring the already volatile crypto markets.