The cryptocurrency market faced a severe downturn during early Asia trading hours after former U.S. President Donald Trump threatened 100% tariffs on Chinese imports via Truth Social, triggering a global risk-off sentiment. The market-wide selloff wiped out over $16 billion in long positions by midday in Hong Kong, marking one of the largest liquidation events of the year.
Bitcoin briefly fell below $110,000 before rebounding to $113,294, while Ether recovered to $3,844 after both suffered double-digit declines. The CoinDesk 20 Index slumped 12.1%, reflecting widespread losses across major digital assets. Crypto’s total market capitalization dropped to $3.87 trillion, with $16.7 billion of the $19.1 billion in total liquidations coming from long traders.
Friday’s market rout was historic in liquidation volume, surpassing those seen during the FTX collapse in 2022 and the COVID-19 market crash, although the percentage decline was smaller due to crypto’s growth since then.
The Ethena team reported that USDe minting and redemptions continued smoothly despite volatility, emphasizing that the stablecoin remains overcollateralized as realized gains offset short-term losses. Still, the stablecoin’s brief dip to $0.9996 reflected mild peg stress during the chaos.
Adding to uncertainty, a U.S. government shutdown has delayed critical economic data releases, leaving markets without key indicators as trade war tensions resurface.
Investor sentiment remains fragile, with traders closely watching macroeconomic developments and political rhetoric that could further disrupt global markets. As Bitwise CIO Matt Hougan noted, despite the turbulence, Solana continues to show one of the strongest setups seen in nearly a decade — a potential bright spot amid a volatile market landscape.
