Cryptocurrency markets experienced a significant downturn, triggering record liquidations just days after Bitcoin reached an all-time high. The volatility was largely prompted by US President Donald Trump’s latest round of tariffs. Cryptocurrency prices tumbled on Friday after Trump announced an additional 100 per cent tariff on China and export controls on software, exacerbating existing market weakness.
The declines precipitated and were amplified by what data tracker Coinglass described as “the largest liquidation event in crypto history.” While market weakness was already present leading into Friday, Trump’s announcement sparked a decline of more than 12 per cent in Bitcoin. The largest token, which had reached a record of more than $US125,000 earlier last week, was hovering around $US110,000 on Sunday afternoon.
Coinglass data indicates that in just 24 hours, bets worth more than $US19 billion were wiped out, and more than 1.6 million traders were liquidated. More than $US7 billion of those positions were sold in less than one hour of trading on Friday. Liquidations occur when a trader’s position is forcibly closed due to a lack of funds to cover potential losses.
These liquidations highlight the inherent volatility and risk associated with cryptocurrency investments, especially in the face of geopolitical and economic policy announcements. The market continues to react to the evolving global landscape and regulatory environment.
