The crypto market took a sharp downturn on Tuesday following US President Donald Trump’s reaffirmation that the planned tariff on Mexico and Canada will proceed as planned starting March 4.
The announcement, made during a White House press conference, confirmed that the administration will move forward with a 25% levy on goods from both nations and a 10% tariff on Canadian energy resources, including oil, natural gas and electricity.
These looming tariffs have heightened investor anxiety over global trade stability, prompting a wave of de-risking in financial markets. The crypto sector was no exception, seeing a 6% decline, with Bitcoin briefly falling below $92,000. Ethereum dived 8% to $2,507.
Crypto Faces Pressure From Global Risks, Not Just Tariff Tensions
James Toledano, chief operating officer at Unity Wallet, commented on the shift in sentiment, noting that many had expected Bitcoin’s price to surge following Trump’s inauguration.
However, he pointed out several factors contributing to market hesitation. These include tariff tensions, ongoing instability in Eastern Europe, and concerns about AI-driven disruptions in the US tech sector. Additionally, upcoming elections in Germany have added to the uncertainty.
“This could also just be a momentary lapse of pricing reason,” he said.
Over 286,000 Traders Liquidated as Market Volatility Surges
Further compounding market instability, CoinGlass data revealed that 286,534 traders were liquidated in the past 24 hours, resulting in $888.39m in total liquidations. Of this, long positions accounted for $815.38m, while $73.01m came from short positions.
Bitcoin ($271.69m) and Ethereum ($192.53m) saw the largest liquidations, followed by Solana ($90.62m), XRP ($38.25m) and Dogecoin ($22.33m). The turbulence reflects a combination of macroeconomic uncertainty and panic-driven selling, intensifying liquidation events across leveraged positions.
Adding to the market’s instability, a major security breach at crypto exchange Bybit has further dented sentiment. A reported $1.4b was drained from a single Ethereum wallet, shaking investor confidence and accelerating sell-offs across multiple assets.
Investor sentiment has notably soured amid these developments. The Crypto Fear & Greed Index, which measures overall market sentiment on a scale of 0 to 100, fell to 25 points on Feb. 25, signaling ‘Extreme Fear’ among traders. The drop suggests that uncertainty over tariffs, security risks, and global economic headwinds has triggered risk-averse behavior, further pressuring the already volatile crypto markets.
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