In August, the cryptocurrency market started on the wrong foot. Ether and Bitcoin both experienced very severe losses as the market turned skittish on the news that former US President Donald Trump is reinstituting global tariffs.
Bitcoin fell to the support level of $114.2 before rebounding to a little over $115K. The general selling followed an immense move in the US Dollar Index, which went over 100 for the first time since May.
Trump Tariffs Trigger Sell-Off
The news that Trump would offer a 10 percent worldwide minimum tariff and a 15 percent tax on the countries that have a trade surplus made global markets shudder. The investors yielded to the economic uncertainty, and the dollar advanced, while equities and digital assets decreased. Demand for safe havens associated with the new trade policy contributed to the worldwide liquidity crunch and worried about the increased overall financial pressure.
Consequently, the digital asset market cap decreased by 4% to reach 3.74 trillion dollars. However, trading volumes increased by 12 percent to hit 195 billion dollars. The price of bitcoin declined over 3 percent in the last 24 hours and was currently changing hands at about $115,035 at the time of publishing. Ethereum came in a close second and dropped by 6 percent to approximately 3,627, after reaching a peak close to 3860 in July.
$758 Million in Crypto Liquidations
According to CoinGlass, a shakeout caused the market to liquidate $758 million in one day. Of this, 93 percent were long positions, which shows overconfidence in the market’s upward trend. Over 183,000 traders were washed out, and the biggest event was a 13.79 million ETHUSD_PERP on Binance.
This is the third significant selling-off period in the current bull run in bitcoin. In late July, realized profits hit the roof at 6 billion to 8 billion dollars, like in March and December 2024. On-chain metrics indicate the new whales were the sellers above $120K, and the distribution is at an all-time high.
Altcoins and Stocks Also Under Pressure
The altcoins dropped universally. XRP and Solana declined by more than 7 percent, Cardano by 8 percent, and SUI by 10 percent. The biggest meme coin, Dogecoin, was trading down 9 percent at 20.5 cents.
The decrease in volume did not affect the altcoin futures volume, which increased, reaching 83 percent of all futures activity. Ether futures soared 170 percent above recent lows and are within 23 percent of record highs. There is also growing retail activity, where BTC transactions below $10,000 rose by close to 10 percent in July alone.
Futures of US stocks dropped, and the S&P was speaking volumes of losses on the fourth day. Amazon lost over 8 percent in premarket trading on its disappointing results.
