NEW YORK (Reuters) -Bitcoin and ether tumbled on Tuesday as U.S.-China tension ramped up, wiping out a rally the day before that was fueled by President Donald Trump’s conciliatory trade remarks.
The U.S. and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world’s two largest economies.
In afternoon trading, bitcoin fell to as low as $110,023.78 and was last down 2.3% at $113,129. The world’s largest cryptocurrency hit a record high above $126,000 on October 6.
Ether, the second-biggest digital currency, slid to a trough of $3,900.80 and was last down 3.7% at $4,128.47. Last Friday, it dropped 12% from the day’s high to a low of $3,436.29.
Altcoins, a term for all cryptocurrencies other than market-leader bitcoin, bore the brunt of the move, with many falling 80% on some exchanges, analysts said.
Exchanges amplified Friday’s selloff by automatically forcing some leveraged investors to close their positions after their collateral fell below certain thresholds, analysts said.
“As long as China’s relationship with the U.S. is shaky and stocks too concentrated in tech, crypto will be struggling as it tends to enjoy good times when other established assets are holding up well,” said Juan Perez, director of trading at Monex USA in Washington.
“But when the fundamentals are not great, crypto struggles to find a base for its value whether it’s bitcoin or ether.”
Tuesday’s price action came days after the crypto market experienced the largest liquidations in history, with more than $19 billion wiped out across leveraged positions late on Friday. The crash came after Trump said he would impose 100% tariffs on Chinese imports, in response to China announcing a major expansion of its rare earths export controls.
