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- Bitcoin crashes below $108K after Trump announces 50% tariffs on the EU, sparking a market-wide selloff.
- Over $500M in crypto liquidations, mostly from long positions, as BTC drops nearly 4% in hours.
- Global markets react sharply, with U.S. indices falling and traders calling it a “headline-driven flush.”
Bitcoin (BTC) faced sudden and sharp volatility during the U.S. market open on Thursday, plunging to lows of $107,367 on Bitstamp. The dramatic drop was triggered by breaking geopolitical news as former U.S. President Donald Trump announced plans for aggressive tariffs on the European Union, shaking investor sentiment and sparking widespread crypto liquidations.
Crypto markets were jolted after Donald Trump took to Truth Social to declare that trade negotiations with the European Union had stalled. In a fiery post, Trump wrote, “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025.”
The announcement sent shockwaves through global markets. Within minutes of the U.S. stock market opening, major indices dropped into the red, with the S&P 500 falling 1% and the Nasdaq Composite sliding 1.2%. The crypto market, already under pressure from high leverage and risk-sensitive sentiment, saw an even more dramatic reaction.
Bitcoin Dives 4% as $500M Gets Liquidated
Bitcoin swiftly declined by nearly 4% within hours of Trump’s statement, briefly touching a low not seen since early May. According to data from CoinGlass, this sharp move triggered nearly $350 million in liquidations within a 4-hour window, with total liquidations over the previous 24 hours exceeding $500 million, most of it from long positions.
Market participants were quick to label the event a classic “headline-driven flush.” Trader Skew posted on X (formerly Twitter):
“Nice aggregate flush of long leverage & de-risk selling from the spot. All driven by headlines once again.”
Fellow trader Daan Crypto Trades echoed the sentiment, stating:
“There’s the break from the compression with a push from Trump. Markets worldwide obviously do not like the news. We’ll have to see where this settles and how BTC holds up versus equities.”
As Bitcoin attempts to recover from the sharp decline, analysts are closely monitoring critical support and resistance zones. Trader Crypto Caesar highlighted a support range just under $110,000, emphasizing that holding above this level is essential for any short-term bullish continuation.
Meanwhile, other traders noted that despite the crash, the order book shows limited resistance above current prices, which could allow BTC to rebound swiftly provided macro conditions stabilize.
“Front ran a $110K tag,” said Skew, referencing real-time liquidity data.
“Important level from here for the market to auction above. Key for continuation.”
Bitcoin Faces Macro Uncertainty Amid Trump Tariff Threat
The broader macro outlook remains uncertain. Analysts at The Kobeissi Letter noted that the Trump administration, and by extension, the markets, face a precarious balance.
“Too much tariff pressure causes the basis trade to unwind. Too little tariff pressure risks inflation expectations rising,” they wrote. “Now, President Trump must find a middle ground to maintain tariffs while also suppressing treasury yields, without the help of Fed rate cuts.”
The Federal Reserve has so far shown reluctance to ease interest rates despite easing inflation data, keeping risk assets like Bitcoin in a state of flux.
The crypto market now enters a period of high alert. With geopolitical tensions rising and monetary policy uncertain, investors are bracing for more volatility. Bitcoin, often seen as both a speculative asset and a hedge, will have to prove its resilience amid external shocks.
As traders continue to monitor critical price levels and macro developments, one thing remains clear: headlines are once again driving the narrative, and the market remains on edge.
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