US President Donald Trump's surprise announcement of new tariffs on imports from China has triggered one of the largest drops in the cryptocurrency market in recent years.
The trade measure announced by President Trump once again fueled latent fears of a trade war, and investors immediately panicked.
The crypto market's reaction to the 100% tariffs was immediate and severe. Most digital assets suffered brutal declines.
Within a few hours, a historic crypto market crash occurred, with billions of dollars in massive liquidations from leveraged long positions (those that bet on a price increase). It is even said to be the largest liquidation event in the history of the cryptocurrency market.
The huge leveraged positions created a magnifying effect on the decline, as when prices began to fall, forced liquidations of these positions were triggered, generating more selling pressure and a cascading decline.
A slow recovery process and the formation of a stable price floor are expected next. The market may need time to digest a drop of this magnitude and absorb all the selling supply.
According to some "experts," this event could represent a buying opportunity. However, it is a time to act with extreme caution, as volatility is very high (remember that a huge number of traders have been liquidated).
Disclaimer: The content of this article cannot be considered investment or financial advice. This post is for informational purposes only.