- Ethereum experienced a 23.6% drop, leading to over $609.9M in liquidations.
- More than $2.24B were liquidated from 730,000 traders in 24 hours.
- Geopolitical factors, including trade tariffs, triggered market uncertainty.
Ethereum has seen a sharp 23.6% decline following announcements of trade tariffs imposed by former US President Donald Trump on imports from China, Canada, and Mexico.
The market’s sudden drop, especially in Ethereum’s open interest, signals that traders are pulling back from leveraged positions, fearing further volatility.
Crypto Markets Plunge Amid Tariff War: Ethereum Faces Major Losses
Ethereum has taken the brunt of a $2.24 billion liquidation wave, with more than $609 million wiped from its long and short positions in just 24 hours. The broader cryptocurrency market has seen a 28% drop, with major altcoins like XRP, Solana, and Dogecoin also recording significant losses. This market downturn can be traced to the announcement of new trade tariffs by the US, triggering global market unease.
Tariffs between the US, China, Canada, and Mexico have increased the risk of inflation, potentially pushing interest rates higher. This change in global economic dynamics has led to a risk-off sentiment, causing both traditional and crypto markets to sell off. The sharp drop in Ethereum’s open interest and funding rate shows traders are pulling back as they anticipate continued market instability.
Binance, the largest crypto exchange, accounted for the majority of liquidations during this period, facilitating 36.8% of the total. Other exchanges like OKX, Bybit, and Gate.IO also experienced substantial liquidations. The liquidation wave primarily affected long traders, who were expecting a bull run that didn’t materialize due to external economic pressures.
With Ethereum’s futures market open interest dropping 27% and its funding rate hitting lows, traders are showing signs of retreat. This could indicate that the market is entering a period of cautiousness, especially with geopolitical uncertainties weighing heavily on investor sentiment. The recent drop in prices raises the possibility of further corrections if the situation continues to unfold unfavorably.
Ethereum’s sharp decline highlights the vulnerability of cryptocurrency markets to geopolitical risks. With ongoing global uncertainties, traders are adjusting their positions, and the market faces potential further corrections in the near future.
“Higher import tariffs could drive up inflation, potentially leading to higher interest rates. This, in turn, triggered a risk-off sentiment, which pressured cryptocurrency prices.”
