Key Points:
- Bitcoin drops 4.5% in 24 hours to $108,000 following Trump’s EU tariff threats
- $638 million in leveraged positions liquidated according to Coinglass data
- Trump proposed 50% tariffs on EU goods starting June 1, 2025
- Altcoins suffered even steeper losses of 3-6%
- Crypto-related stocks underperformed with notable declines in treasury companies
Market Shock Following Tariff Announcement
Bitcoin has experienced a sharp 4.5% decline over the past 24 hours, dropping to $108,000 following President Trump’s announcement of potential 50% tariffs on European Union imports. The unexpected policy shift triggered a broad market sell-off that extended well beyond cryptocurrencies.
The market reaction was particularly violent in leveraged positions, with approximately $638 million in crypto derivatives liquidated according to data from Coinglass. The liquidation cascade intensified as prices fell, with $350 million wiped out in just a 4-hour window, eventually reaching over $500 million in total liquidations within 24 hours.
Trump’s Tariff Proposal and Conditional Flexibility
President Trump has recommended implementing a 50% tariff on European Union goods beginning June 1, 2025, unless the products are manufactured in the United States. While maintaining a firm stance that he doesn’t intend to negotiate with the EU, Trump hinted at potential flexibility, suggesting tariffs might be delayed if European companies establish factories on American soil.
This conditional approach has created significant uncertainty in global markets, with investors struggling to price in the economic impact of these potential trade barriers.
Broader Crypto Market Impact
The market turbulence extended throughout the cryptocurrency ecosystem:
| Asset | 24-Hour Change |
|---|---|
| Ethereum | -3% to -6% |
| XRP | -3% to -6% |
| Solana | -3% to -6% |
| Dogecoin | -3% to -6% |
| Cardano | -3% to -6% |
Publicly-traded companies with Bitcoin exposure also faced significant pressure:
- MicroStrategy: Approximately 6% decline
- Semler Scientific: Around 6% drop
- Japan’s Metaplanet: Steep 24% fall
Despite Bitcoin reaching a fresh all-time high earlier this week, crypto-related equities have notably failed to match these gains, suggesting a divergence in sentiment between direct cryptocurrency holders and stock market investors.
Strategic Challenges for the Trump Administration
Market analysts at The Kobeissi Letter highlight the delicate balance the Trump administration must maintain. If tariffs are implemented too aggressively, they risk derailing current market dynamics and potentially triggering retaliatory measures. Conversely, a more moderate approach might fuel inflation expectations.
The administration faces several competing objectives:
- Maintaining tariffs high enough to project economic strength
- Avoiding upward pressure on Treasury yields
- Navigating these challenges without Federal Reserve support, as interest rate cuts remain uncertain
Technical Analysis and Future Outlook
Cryptocurrency analyst Benjamin Cowen suggests that Bitcoin’s recent decline follows a pattern typically observed after a “golden cross” technical formation. He anticipates the current pullback may persist for several days before potentially rebounding next week.
Many analysts emphasize that the current crypto market cycle demonstrates significantly different characteristics from previous cycles:
“This crypto cycle is way more complex and different from the past ones. So, there’s no reason to expect the rest of it to follow the same old 4-year pattern.”
Analyst Michaël van de Poppe advises investors to maintain flexibility in their outlook over the next 1-2 years, as market developments may diverge from historical patterns. He projects potential for an extended cycle with Bitcoin possibly reaching $400,000-$600,000 by 2026/2027, with altcoins potentially achieving even more substantial percentage gains.