President Trump’s announcement of new tariffs on European nations sparks widespread liquidations in crypto markets, pushing Bitcoin lower and rattling investor confidence.
President Donald Trump’s weekend announcement that the United States will impose escalating tariffs on eight European countries has sent shockwaves through global markets — and the crypto space was hit particularly hard. Within 24 hours of the announcement, approximately $875 million in leveraged crypto positions were liquidated, and Bitcoin slipped about 3% to around $92,000 as traders rushed to reduce risk exposure.
The tariff plan — in part tied to Trump’s controversial push for Greenland — was made public during thin holiday trading hours, amplifying market volatility and pushing liquidations significantly higher than expected. The majority of these forced liquidations came from long positions, where traders had bet on price gains, leaving them vulnerable when markets turned suddenly bearish.
Major leveraged exchanges such as Hyperliquid, Bybit, and Binance saw the brunt of the carnage, with long positions comprising over 90% of all forced closures within that period. Analysts have noted that while markets are sensitive to macroeconomic shocks, the severity of liquidations underscores the heightened risk appetite traders were carrying.
Despite the short-term selloff, some analysts argue that forced deleveraging might set the stage for more stable support levels should risk demand slowly return. However, geopolitical tensions remain a major headwind for market sentiment.
European Backlash and Broader Market Fallout
European leaders reacted strongly to Trump’s tariff threat, with officials immediately condemning the move and warning of swift retaliatory measures. French President Emmanuel Macron called for activation of the EU’s so-called “trade bazooka” — an anti-coercion tool designed to block US market access and impose restrictions on American goods and services.
Beyond political rhetoric, markets outside of crypto also felt the shock. US stock futures fell, gold surged as investors fled to safe-haven assets, and traditional risk markets faced heightened pressure amid growing uncertainty. The dollar weakened against safe currencies such as the yen, reflecting a broad shift toward caution.
European institutions moved to pause ratification of a key trade deal with the US, a pact that had lowered many tariffs but was criticized for favoring American access. Brussels also signaled readiness to re-implement billions in retaliatory tariffs delayed under previous agreements, a sign that transatlantic trade friction may escalate further.
The broader implications extend beyond crypto, with economists warning that trade tensions could dent earnings forecasts and slow growth in both the US and Europe. As geopolitical risk becomes more pronounced, global financial markets may remain fragile for the foreseeable future.
