- Crypto markets saw nearly $500 million in liquidations following new U.S.-China trade tensions.
- Long positions suffered the most, with losses around $450 million; short liquidations were about $40 million.
- Ethereum and Solana recorded the largest losses among major cryptocurrencies, dropping over 5% and 4%, respectively.
- Bitcoin declined 2%, falling below $119,000, which is 5.5% lower than its recent all-time high.
- Market volatility followed statements from President Donald Trump threatening higher tariffs on Chinese imports after export controls on rare earth elements.
A sudden round of liquidations struck cryptocurrency markets on Friday, erasing nearly $500 million in value. The downturn was triggered after U.S. President Donald Trump issued threats of significant new tariffs in response to China’s restrictions on rare earth exports, leading to sharp price drops across major digital assets.
According to data from CoinGlass, around $490 million in leveraged crypto positions were wiped out in one hour. Over the past 24 hours, liquidations reached about $900 million in total. The majority of these losses affected long traders, who lost roughly $450 million. Short traders saw liquidation losses of about $40 million.
Within the top ten cryptocurrencies, Ethereum (ETH) and Solana (SOL) led the declines. Ethereum dropped more than 5%, and Solana fell by about 4%. Sentiment data showed neutral trends for Ethereum, while outlook on Solana remained bullish among retail investors. Bitcoin (BTC) also fell 2%, with prices slipping below $119,000, marking a 5.5% decrease from its all-time high earlier this month. Retail chatter around Bitcoin continued to show a bullish tone.
The turbulence in crypto markets followed President Trump’s comments on potential U.S. policy actions. “One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America,” Trump wrote. He also indicated that more countermeasures were being considered and criticized China’s export restrictions, stating “there is no way” China should be allowed to hold the world captive with its rare earth policies.
Broader equity markets also dropped after these statements, reflecting a wider reaction to escalating trade tensions between the United States and China.
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