The cryptocurrency market faced a major setback on March 4, with over $1 billion in liquidations as a result of escalating trade tensions. The majority of these liquidations stemmed from long positions, with Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) experiencing sharp declines, according to CoinGlass.
Crypto traders faced a brutal sell-off, with long positions accounting for 87% of total liquidations. The downturn followed the announcement of a 25% tariff hike on Canada and Mexico by US President Donald Trump, which also sent traditional markets tumbling.
BTC, which had briefly touched $93,000 on March 3, fell below $82,000 in response to the news. Ethereum dropped 12%, while Solana plunged by 20%. Other altcoins, including XRP and Cardano (ADA), saw over $150 million in combined liquidations.
"Trump Effect" Reversed?
The drop came as a surprise to traders, who had been optimistic following Trump’s March 2 statement about launching a US crypto reserve holding BTC, ETH, XRP, and ADA. This announcement had fueled a temporary price surge, only to be wiped out by the tariff decision.
Bitcoin, which rose from $69,374 on Election Day to $108,786 when Trump took office, has since declined nearly 26%, showing that macro factors can outweigh industry optimism.
Crypto exchanges Bybit and Binance led in liquidation volumes, recording $411.54 million and $242.25 million, respectively. The largest single liquidation occurred on Bitfinex, where a $13.40 million BTC position was forcefully closed.
Crypto president is in the office. Recent liquidations:
— HodlFM Team (@Hodl_fm) March 5, 2025
- $900M (Feb 23)
- $1.2B (Feb 24)
- $800M (Feb 25)
- $1.1B (Feb 27)
- $800M (Mar 2)
- $1.2B (Mar 3)
Traders getting REKT as Trump's getting richer.$BTC $ETH $SOL $XRP $ADA $AAVE pic.twitter.com/KaQYIhRdgO
Despite the market turmoil, some analysts remain bullish. RektCapital noted that Bitcoin’s price has filled a CME gap between $84,650 and $93,300, suggesting a potential rebound. Others argue that the bull cycle is still intact, but recovery may take time amid weak US market sentiment.
#Bitcoin market will likely remain slow until sentiment in the U.S. improves.
— Ki Young Ju (@ki_young_ju) March 4, 2025
There’s no significant on-chain activity, and key indicators are neutral, suggesting the bull cycle is still intact. Fundamentals remain strong, with more mining rigs coming online.
If the cycle ends… https://t.co/fSWl26d0gx pic.twitter.com/byWdweZhSQ
With trade war fears and global economic uncertainty mounting, traders will need to brace for continued volatility in the crypto markets.
HODL Team
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