Bitcoin’s price has taken a steep dive, crashing below the $75,000 mark as investors across the globe respond to the ripple effects of a sweeping new tariff policy introduced by U.S. President Donald Trump. The flagship cryptocurrency touched an intraday low of $74,637, marking a dramatic fall of over 10% from last week’s peak of $84,000.

This sudden drop has rattled the crypto markets, underscoring the sensitivity of digital assets to global macroeconomic developments. The turbulence is not limited to the crypto world alone — traditional markets have also been heavily impacted, with the Dow Jones Industrial Average suffering notable losses.

U.S. Tariffs Spark Fears of Escalating Trade War

Investors Retreat from Risk as Economic Uncertainty Deepens

At the center of this financial upheaval is a major policy shift from the U.S. government. The recent imposition of blanket tariffs on all imported goods has raised alarm bells around the world. Economists and market analysts warn that such aggressive protectionist policies could ignite a new global trade war, reminiscent of the 2018–2019 U.S.-China trade standoff that caused widespread market instability.

As a result, investors are rapidly shifting away from riskier asset classes. Cryptocurrencies, which are often considered speculative, have borne the brunt of this risk-off sentiment. Bitcoin, once hailed as a hedge against traditional financial instability, has found itself caught in the broader wave of sell-offs.

Last week, Bitcoin was surprisingly resilient — holding firm in the $83,000 to $84,000 range — even as stock markets and gold prices wavered. However, the latest developments have triggered a significant loss of confidence. Bitcoin’s price is now down a staggering 28% from its all-time high of $109,000, recorded in January 2025.

Ethereum, Altcoins Also Plunge in Market-Wide Liquidation Event

$853 Million Wiped Out Across Digital Assets in 24 Hours

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has experienced even steeper losses than Bitcoin. It dropped by 14.66% in a single day, falling to $1,544.63. The broader crypto market has also seen widespread damage.

Data from CoinGlass indicates that over $464 million in long positions were liquidated from Bitcoin and Ethereum alone in the past 24 hours. When accounting for all cryptocurrencies, total liquidations surpassed $853 million. This wave of forced selling affected more than 280,000 traders worldwide, further compounding the downward pressure on prices.

Major altcoins such as Solana, Dogecoin, and XRP were not spared either, with each registering double-digit percentage declines. Even the Coinbase 50 Index, which tracks the 50 most-traded tokens on the exchange, fell by 11.08%.

Warning Signs Point to Further Declines

Analysts Say Broader Economic Fears Could Extend the Sell-Off

Research group 10X Research has highlighted the breakdown of key support levels as a signal of further downside risk. Specifically, analysts have pointed out Bitcoin’s fall below the critical $96,000 support zone as an early indicator that the bearish trend is likely to continue.

Market watchers now believe that the downturn is not just a temporary pullback but rather a reflection of deeper concerns about the global economy. Inflation fears, weakening industrial production, and shrinking international trade volumes are all contributing to the panic.

Adding to the anxiety, China has responded to the U.S. tariffs by implementing its own countermeasures — introducing a 34% tariff on a wide range of American imports. This tit-for-tat escalation has left many investors bracing for a prolonged period of uncertainty, with no clear resolution in sight.

U.S. Federal Reserve Caught in a Dilemma

Interest Rate Cuts Unlikely Despite Market Collapse

Despite mounting losses in both the crypto and traditional markets, the U.S. Federal Reserve has shown little inclination to respond with emergency rate cuts. Fed Chair Jerome Powell acknowledged the economic risks associated with the new tariffs, warning that they could drive up prices and lead to higher inflation.

Although recent employment data from the U.S. nonfarm payrolls report was relatively strong, Powell stressed that the central bank must tread carefully. Cutting rates too quickly could fuel inflation, while maintaining the current stance could prolong market volatility.

This cautious approach from the Fed has left markets vulnerable, with no immediate monetary policy relief in sight.

Global Markets Lose Trillions in Value

S&P Global Broad Market Index Reflects Historic Losses

The broader financial markets have not fared any better. The S&P Global Broad Market Index — which includes both U.S. and international equities — recorded an astonishing $7.46 trillion loss in total market value over just two trading sessions.

Of that amount, $5.87 trillion was wiped from U.S.-based stocks, while international markets lost another $1.59 trillion. These figures, compiled by S&P Dow Jones Indices, reflect one of the most severe short-term collapses in recent financial history.

This unprecedented decline has erased months of gains and cast a long shadow over the global economy. Many analysts now fear that the losses could trigger a wider recession, especially if trade tensions remain unresolved.

The Outlook for Crypto: Volatility Likely to Continue

Market Awaits Regulatory Clarity and Macroeconomic Stability

As of now, Bitcoin remains approximately 28% below its all-time high, with sentiment in the crypto space turning increasingly bearish. Traders are keeping a close eye on upcoming geopolitical developments and potential regulatory changes that could either stabilize or further destabilize the market.

Institutional investors, who have played a major role in the recent growth of the crypto market, are also reassessing their positions in light of the ongoing volatility. Many are looking for clear signals from both regulators and central banks before committing new capital.

Some market participants remain optimistic that Bitcoin could recover once macroeconomic conditions stabilize. However, others believe the days of meteoric gains may be behind us — at least for the near term.

Conclusion: Crypto’s Path Forward Hinges on Global Stability

The recent collapse in Bitcoin’s price — triggered by far-reaching economic policies and geopolitical tension — underscores how integrated the cryptocurrency market has become with the broader financial system. Once considered a countercultural alternative to traditional finance, digital assets are now deeply influenced by global macroeconomic forces.

Until there is greater clarity on trade relations, inflation trends, and central bank policy, Bitcoin and other cryptocurrencies are likely to remain volatile. For now, both casual investors and seasoned traders are watching closely, waiting to see where the markets head next.