Key Points
- XRP, Dogecoin (DOGE), and Cardano’s ADA dropped over 25%, reversing previous gains and reaching levels not seen since before the U.S. elections in November.
- Major altcoins witnessed declines of 40-50% over the past month, marking one of the sharpest downturns in recent history.
- The total market capitalization fell by 12%, the most significant drop in over a year, with the CoinDesk 20 index down 10%. Bitcoin (BTC) fell by 6%.
Background
A significant wave of liquidations hit the market, driven by new tariffs imposed by the U.S. on Canada and Mexico, igniting fears of a global trade war and negatively affecting risk assets.
Total crypto liquidations surpassed $2.2 billion, marking the highest level this year and one of the largest in the previous twelve months. The biggest liquidation occurred on Binance from a tether-margined ETH trade worth $25 million. Many traders warn that losses could continue throughout the week due to the prevailing market conditions.
Comments from Analysts
“Massive long futures liquidation was observed over the weekend with over 2 billion in futures stop outs within the last 24 hours, marking a significant liquidation event in crypto history,” said Augustine Fan, head of insights at SignalPlus, in a Telegram message.
This correction stems from tariffs imposed by U.S. President Donald Trump, which have disrupted trade relations in North America, with concerns mounting about cost increases on goods and potential economic slowdown.
