Bitcoin and major cryptocurrencies plunged as tariff tensions between the US and EU led to a $100 billion fallout and heavy, prolonged liquidations, pushing BTC towards critical support.
Summary
- Bitcoin lost tens of billions in value as the cryptocurrency market capitalization fell by around $100 billion within hours due to tariff threats between the US and EU.
- On-chain data showed large coordinated BTC sales by whales, exchanges and market makers, leading to successive long liquidations.
- BTC is now hovering near key Fibonacci and trendline support, with analysts split between a deeper 2022-style dump and a relief towards $98,000 – $100,000.
Bitcoin (BTC) and other cryptocurrencies saw a sharp decline this weekend as geopolitical tensions led to widespread selling and significant liquidations in the digital asset markets, market data shows.
The leading cryptocurrency lost significant value during the sell-off, with the total cryptocurrency market capitalization falling by about $100 billion within hours, according to market tracking services.
DeFiTracer, a blockchain analytics platform, reported that large holders sold large amounts of Bitcoin during the downturn, with institutional participants and exchanges among them divesting positions. The analytics firm characterized the activity as coordinated selling involving major holders, exchanges and market makers.
Multiple tracking services reported that major cryptocurrencies fell while trading volume increased significantly during the market move. According to price data, Bitcoin remained modestly higher over a seven-day period despite recent volatility.
Market analysts attributed the decline to escalating trade tensions following tariff threats from the United States against European countries and reports of planned retaliatory measures from the European Union. The announcements coincided with statements on Greenland, and US stock index futures opened lower. Risk assets fell overall, with the cryptocurrency market feeling the impact of large-scale liquidations.
Market commentators stated that the decline reflected a broader sense of risk rather than cryptocurrency-specific weakness, noting the interaction between geopolitical developments and high-leverage trading positions.
Technical analysts identified a potential reversal pattern at the 38.2% Fibonacci retracement level after a recent rejection at that technical threshold. Some analysts drew comparisons to the price action in 2022, when Bitcoin briefly tested a similar technical level before a steep decline that coincided with the collapse of the stock market’s FTX and monetary tightening by the Federal Reserve.
Other analysts noted differences in current macroeconomic conditions, citing indications of monetary policy adjustments and continued high volatility and leverage in the cryptocurrency markets. The liquidation activity suggested that over-indebted traders were contributing to the price movement, with market makers and exchanges appearing to anticipate the decline, market observers said.
According to technical analysts, Bitcoin is now approaching critical support levels as traders eye for further downside or a possible recovery.
