Ethereum Leads $2.4 Billion Market Liquidation Amid Global Tariff Wars

Table of Contents

Ethereum (ETH) suffered the biggest loss in the recent market retracement due to Trump’s import tariffs, accounting for nearly $609.9 million in combined long and short liquidations.

This sharp market decline has been compared to previous financial challenges, such as the FTX collapse and even the COVID-19 induced crash.

Binance Records the Biggest Ethereum Liquidation

The fundamental driver of this dramatic slump is rising geopolitical tensions, particularly the expanding global tariff wars. Investor confidence plummeted following US President Donald Trump’s announcement of increased tariffs on imports from China, Canada, and Mexico. The ripple effect was immediate with cryptocurrency prices dropping as traders looked to limit risks.

Also read: Donald Trump Halts US Aid to South Africa Over Land Seizure Plans

More than 730,000 traders were caught in the liquidation wave, highlighting the broad concern. According to CoinGlass statistics, the greatest single liquidation order, worth $25.6 million, was placed on Binance for the Ethereum/Bitcoin trading pair.

The Role of Major Exchanges in the Sell-Off

Global cryptocurrency exchanges played a critical role in aiding these liquidations. Binance dominated the market, accounting for 36.8% of all liquidations. OKX, Bybit, Gate.IO, and HTX were also major participants with large liquidation volumes.

Interestingly, the majority of the losses came from long traders, who together lost nearly $1.88 billion, or approximately 84% of the total liquidations. This suggests that many investors were expecting a continued bull run but were caught off guard by the abrupt geopolitical events.

Also read: Trump Tariffs Hit Hard: Stocks Plunge, Crypto Market Sheds $450 Billion

The Crypto Fear & Greed Index by Alternative.me indicates a significant shift in market sentiment towards ‘fear’. This psychological change reflects investors’ increased concern about the future of their holdings in the face of global uncertainty.

However, seasoned investors understand that extreme fear frequently indicates potential purchasing opportunities. Historically, downturns like these have paved the way for future gains, provided they are handled intelligently.

Also read: Bitcoin ETF Inflows: Bitwise CIO Forecasts $50B Surge in US

Meanwhile, in January, US spot Bitcoin ETFs received approximately $5 billion in investments. This indicates substantial institutional and retail interest. Analysts predict potential inflows of up to $50 billion by the end of the year which may fuel further price hikes.

Author

Steven Walgenbach

Steven's passion for cryptocurrency and blockchain technology began in 2014, inspiring him to immerse himself in the field. He notably secured a top 5 world ranking in robotics. While he initially pursued a computer science degree at the University of Texas at Arlington, he chose to pause his studies after two semesters to take a more hands-on approach in advancing cryptocurrency technology. During this period, he actively worked on multiple patents related to cryptocurrency and blockchain. Additionally, Steven has explored various areas of the financial sector, including banking and financial markets, developing prototypes such as fully autonomous trading bots and intuitive interfaces that streamline blockchain integration, among other innovations.

View all posts