The cryptocurrency market experienced significant upheaval early Friday as a sharp sell-off erased over $16 billion in long positions. This dramatic downturn was triggered shortly after U.S. President Donald Trump announced the possibility of imposing 100% tariffs on Chinese imports via a post on Truth Social, escalating fears of an intensifying trade conflict.
The announcement sparked a global risk-off sentiment that reverberated across multiple asset classes, hitting digital currencies particularly hard during Asia trading hours. The sell-off resulted in Bitcoin briefly falling below $110,000—a 10% decline within 24 hours—before partially rebounding to $113,294. Ether also dropped, touching lows near $3,844. The CoinDesk 20 Index, which tracks the largest crypto assets, slid by 12.1% amid widespread losses.
The total market capitalization of cryptocurrencies contracted to approximately $3.87 trillion. Analysts recorded roughly $19.1 billion in liquidations during this period, with nearly $16.7 billion of that stemming from long liquidations. This represents one of the most substantial liquidation events in terms of dollar volume in recent times, outpacing notable sell-offs linked to the 2022 FTX collapse and the initial COVID-19 pandemic market crash. However, in proportional terms, the market impact was less severe relative to the overall growth of the crypto ecosystem since 2022.
Amid the volatility, Ethena’s USDe stablecoin experienced a slight deviation from its $1 peg, briefly printing at $0.9996. The team behind Ethena confirmed that minting and redemptions remained fully operational throughout the market turmoil. They further noted that the stablecoin’s collateralization improved as unrealized losses on short positions converted to realized gains, providing additional buffer amid fluctuating conditions.
Compounding trader uncertainty, ongoing delays in the release of key U.S. economic indicators due to the federal government shutdown have left markets navigating without fresh official data. This comes at a critical time when trade war rhetoric is resurfacing prominently, adding complexity to market sentiment.
This recent crash marks a notable event in 2025’s financial landscape, underlining how global geopolitical developments can swiftly ripple through the cryptocurrency space. Despite the sharp declines and large-scale liquidations, the market has shown signs of stabilization with prices recovering modestly after the initial sell-off.
