Over the weekend, the crypto market has seen a massive bloodbath probably the biggest crash ever, with $2.24 billion wiped out in just 24 hours. Ethereum took the hardest hit, falling below $3,000 and causing over $600 million in liquidations. This massive sell-off was triggered by growing global tensions surrounding President Trump’s new trade tariffs, which have rattled investor confidence.
Ethereum Leads the Liquidation Event
Ethereum (ETH) led the charge in this massive liquidation, with over $609 million in positions wiped out as per data. The DeFi markets also faced panic selling which quickly spread across all products. Other major altcoins, like Cardano and Solana, took a nosedive.
Analysts are warning that if the economic and political problems continue, Ethereum and other crypto could drop further. Investors are now looking to see if Bitcoin and Ethereum can hold critical support levels, or if the market will see more downward movement.
What’s Causing the Ethereum Price Crash?
The real culprit behind the downtrend is the ongoing trade war between the U.S. and other countries. The U.S. recently imposed a 25% tariff on goods from Canada and Mexico, and a 10% tariff on Chinese products.
In response, Canada imposed tariffs on U.S. goods. President Trump is also considering tariffs on the European Union and BRICS nations if they create their currency.
These trade tensions are causing fears of inflation, delaying interest rate cuts, and increasing economic uncertainty. Investors had hoped for a positive market rally, but instead, they’re seeing a sharp decline.
A strategy to wipe the “Greed” from the market?
The impact of this massive sell-off was felt the most on major crypto exchanges like Binance, which accounted for 36.8% of the liquidations. Other exchanges like OKX, Bybit, and Gate.IO also saw significant losses. The majority of liquidations (84%) came from long traders, who were betting on a market rebound. Instead, they faced massive losses.
As the market sentiment turns to “fear,” many investors are becoming cautious about their positions. Historically, fear in the market can signal a potential buying opportunity, but with the ongoing global tensions and economic uncertainty, it’s hard to predict what will happen next.
Analysts weigh the Current Sentiments
Peter Schiff, a well-known Bitcoin critic, highlighted in his X post that the recent crypto market downturn is a sign of a “long crypto winter.” He pointed out Bitcoin’s 7% drop, trading above $93,000, and Ethereum’s sharp 33% plunge, falling to as low as $2,100. Schiff used the famous Punxsutawney Phil, the groundhog known for predicting the length of winter, to suggest that the crypto market is in for a prolonged downturn.
Meanwhile, Bitcoin advocate Michael Saylor responded by urging people not to sell their Bitcoin. The crypto sell-off was sparked by macroeconomic concerns, leading to a significant drop in both Bitcoin and Ethereum, along with a nearly $360 billion drop in the market’s total value.
