The cryptocurrency market faced a severe downturn on Tuesday, with Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Solana (SOL), and other major tokens dropping up to 28% within 24 hours. The sell-off was triggered by a wave of liquidations and escalating trade tensions following former U.S. President Donald Trump’s tariff war announcement.
Crypto Market Hit by Sudden Liquidations and Tariff Concerns
According to market data, over $120 million worth of crypto assets were liquidated in just one hour, contributing to heightened volatility and an overall bearish sentiment.
“All the gains BTC and other cryptocurrencies made in the previous session were erased, leading to over $1 billion in liquidations,” stated the CoinSwitch Markets Desk. This sell-off coincided with Trump’s confirmation of tariffs on China, Mexico, and Canada, further amplifying economic uncertainty.
Altcoins Lead the Market Crash
According to CoinMarketCap data, Cardano (ADA) was the biggest loser, dropping over 28% to $0.7685 from its 24-hour high of $1.07. The altcoin’s market capitalization plunged to $28 billion, while its trading volume fell 30%.
Similarly, Solana (SOL) dropped more than 21%, declining to $134.02 from its peak of $170.13, with its market cap slipping below $70 billion and trading volumes falling 24%.
Ripple’s native token XRP declined nearly 21%, dropping to $2.23, with its total valuation falling below $130 billion. Meanwhile, Elon Musk-backed Dogecoin (DOGE) lost 18%, slipping to $0.1876, as its market cap dropped below $30 billion and trading volume decreased 21%.
Bitcoin and Ethereum Face Heavy Selling Pressure
The largest cryptocurrency, Bitcoin (BTC), fell about 12%, dropping to $82,467.24 from its previous day’s high of $93,664.05. Despite the decline, Bitcoin’s trading volume increased by 14%, reflecting heightened market activity.
Its closest peer, Ethereum (ETH), plummeted over 18%, falling to $2,004.21 from $2,453.65. Ethereum’s market capitalization barely held above $250 billion, while trading volume dropped 9%.
The global cryptocurrency market capitalization dropped to $2.75 trillion, marking an 11.20% decline in the last 24 hours. Total trading volume fell 1.55% to $185.32 billion, while Bitcoin’s dominance increased to 60.17%, up 0.46% from the previous day.
Leverage Liquidations Accelerate Downtrend
According to Delta Exchange CEO Pankaj Balani, the downturn was exacerbated by leveraged traders who entered the market after Trump’s Sunday announcement of a U.S. Crypto Strategic Reserve. More than $1 billion in long positions were liquidated, leading to a cascading effect.
“There are two opposing forces at play in crypto right now,” Balani explained. “While the market is hopeful about Trump’s pro-crypto stance, escalating trade tensions and economic uncertainty are keeping risk assets under pressure.”
Macroeconomic Concerns and Crypto Volatility
The recent price drop in Bitcoin and other cryptocurrencies appears to be a knee-jerk reaction to Trump’s tariff policy, which has rattled both crypto and traditional financial markets.
“This pattern has been observed across multiple asset classes,” said ZebPay COO Raj Karkara. “However, it’s important to note that short-term volatility can also create trading opportunities.”
Upcoming White House Crypto Summit Could Influence Market Direction
Despite the ongoing sell-off, investors are eyeing the upcoming White House Crypto Summit on Friday, where more policy announcements are expected.
“The market remains at a crossroads,” Balani added. “On one side, we have growing regulatory clarity and institutional adoption, while on the other, macro uncertainty and risk-off sentiment are weighing on prices. We expect continued volatility as traders assess the next steps.”
From Rally to Sell-Off: The Crypto Market’s Wild Week
Just a day before the crash, crypto tokens surged up to 75% following Trump’s announcement of a U.S. Crypto Reserve, which would include altcoins like Cardano, Ripple, and Solana, alongside Bitcoin and Ethereum.
However, the rally was short-lived as concerns over implementation, economic risks, and mass liquidations triggered a sharp reversal.
“The market’s reaction highlights the sector’s sensitivity to policy shifts,” said Pi42 CEO Avinash Shekhar. “While the idea of a government-backed crypto reserve stirred optimism, it also underlined the need for clearer regulations to reduce volatility and improve investor confidence.”
Final Thoughts
The crypto market remains highly volatile, reacting sharply to macroeconomic events and regulatory shifts. While Trump’s crypto reserve initiative has fueled long-term optimism, short-term traders face significant risks amid ongoing economic uncertainty.
With the White House Crypto Summit approaching, the market’s next move will likely depend on policy signals and broader economic conditions. Investors are advised to exercise caution and adopt sound risk management strategies in the face of ongoing turbulence.
