Cryptocurrency derivatives traders suffered more than $1 billion in liquidations in the past 24 hours as fears of a looming trade war sent markets tumbling, according to data from CoinGlass.
More than 87% of liquidations came from long positions after a volatile start to March that saw double-digit losses on March 4 erase similarly large gains from only days earlier, the data showed.
On March 4, US President Donald Trump imposed 25% tariffs against Canada and Mexico, the United States’ largest trading partners, sending the S&P 500 stock index down nearly 2% in morning trading.
Bitcoin (BTC) declined to around $82,000 after touching highs of around $93,000 on March 3, according to data from Google Finance. Cryptocurrencies such as Ether (ETH) and Solana (SOL) fell even further, dropping by around 12% and 20%, respectively.
The drawdown was a bait-and-switch for traders who turned optimistic after Trump tipped plans on March 2 to create a US crypto reserve holding tokens ranging from BTC and ETH to XRP (XRP) and Cardano (ADA).
Bitcoin longs comprised the largest portion of liquidated positions, at upward of $300 million in the past 24 hours, according to CoinGlass.
Meanwhile, SOL, XRP and ADA positions collectively suffered more than $150 million in liquidations, the data showed.
Crypto liquidation heatmap. Source: CoinGlass
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Those three cryptocurrencies all saw significant gains after Trump said they would be included in his planned US crypto reserve.
The tariff turmoil promises to erase gains from the so-called “Trump effect,” which saw Bitcoin’s price rise from $69,374 on Election Day (Nov. 5) to a record $108,786 when the new administration took office on Jan. 20.
Since then, Bitcoin’s price has mostly fallen, dropping to less than $80,000 on Feb. 28 — a 26% decline, according to Cointelegraph data.
The sell-off signals that macro factors — such as a looming trade war and weakening global economy — could overpower bullish industry developments, including the US Securities and Exchange Commission’s dismissal of several lawsuits against crypto firms in February.
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