U.S. President Donald Trump sparked panic in the crypto market after threatening to massively increase tariffs on China. This led to a sharp drop in Bitcoin, which fell below the $120,000 support level following the president’s threat.
Bitcoin Drops As Trump Threatens China
TradingView data shows that BTC sharply dropped below $120,000 as President Trump threatened to increase tariffs on China. The flagship crypto was trading just above $121,000 before the president’s comments, but quickly fell as the threat sparked market-wide tensions.
Source: TradingView; Bitcoin Daily ChartIn a Truth Social post, Trump said China had become “hostile” and accused the country of seeking to monopolize the market through export controls on rare-earth metals. In line with this, he revealed that one of the policies that the U.S. is considering at the moment is a massive increase in tariffs on Chinese products coming into the country, a development that is bearish for Bitcoin and the broader crypto market.
The U.S. president also said that they are considering many other countermeasures. This development has revived memories of the Trump tariffs, which led to a trade war between the U.S. and China. However, both countries were working on a trade agreement, which prompted the U.S. president to pause the proposed tariffs on China.
With tensions once again building, Bitcoin and other risk assets are at risk, given how macro uncertainty could impact markets. Besides BTC, altcoins also witnessed sharp declines on the back of Trump’s comments.
The Ethereum price dropped below $4,200, down over 3% on the day. Solana, XRP, and Dogecoin are also down over 2%, with most of the losses coming following Trump’s threat to China.
The U.S. president also mentioned how he was supposed to meet China’s President Xi Jinping, but now there seems to be no reason to do so. He also noted that the relationship with China over the past six months has been very good, which makes the Asian country’s move on Trade more surprising.
$420 Million In Long Positions Liquidated
CoinGlass data shows that just over $420 million in long positions have been liquidated in the last hour, following the crypto market decline. Bitcoin and Ethereum accounted for $73 million and $175 million of these liquidated long positions, respectively.
Source: CoinGlassMeanwhile, there have been $895 million in liquidations in the last 24 hours. $723 million was in long positions, while $172 million was in short positions. Bitcoin was already in a downtrend before Trump’s comments, struggling to break above the $125,000 resistance.
As CoinGape reported, BTC OG whales are currently outselling institutional buyers. These whales have been selling into all-time highs (ATHs), a trend that has typically triggered significant pullbacks whenever the flagship crypto hits a new high.
However, institutional investors continue to accumulate on every dip. This is evident through the Bitcoin ETFs, which have been seeing record inflows, taking in $3.24 billion last week, their second-largest weekly inflow ever.
Source: https://coingape.com/bitcoin-falls-after-trump-threatens-massive-increase-in-tariffs-on-china/
