The President of the United States, Donald Trump, announced the imposition of a 50% tariff on all imported products from the European Union, set to begin on June 1st. The measure caused apprehension among crypto investors, reversing the previous optimistic momentum of the sector.
The tariffs were justified by Trump as a response to persistent trade imbalances and regulatory barriers. He accused the EU of adopting unfair practices that harm American businesses.
Indicators point to uncertainty in the market
Bitcoin dropped from $111,000 to $108,000 after the announcement. Since then, it has recovered to around $109,000 but remains under pressure. The cryptocurrency market as a whole recorded a 4% decline in the last 24 hours, reflecting a climate of caution among investors amid trade tensions.
Bitcoin Price Chart Today. Source: TradingView
Data from Coinglass indicates that, in the last four hours, positions in crypto assets worth $64.13 million were liquidated. Long positions accounted for $34.05 million, while short positions totaled $30.09 million.
Bitcoin concentrated $24.4 million of those liquidations, followed by Ethereum with $15.16 million.
Meanwhile, the long-short ratio of BTC remains nearly balanced, signaling uncertainty in the short term regarding market direction. The day before, long positions in Bitcoin represented 54% of the total, dominating the charts.
Bitcoin Long-Short Ratio in the Last Month. Source: Coinglass
Solana, XRP, and several altcoins experienced strong fluctuations, mirroring the instability of the market. Most of these alternative coins recorded more pronounced liquidations in long positions, indicating that retail investors were caught off guard by the abrupt change in U.S. trade policy.
Macroeconomic concerns gain strength
The trade agreement between the United States and China, signed earlier this month, had provided a boost to the crypto market, signaling that some of the macroeconomic volatility was already priced in. However, Trump's new threats to the European Union have reignited fears.
Analysts warn that the imposition of tariffs may represent the beginning of a broader economic disruption. European stock indices recorded significant declines, while the technology sector in the United States also faced strong selling pressure.
The trade war is back:
After a brief pause, Trump just threatened 50% tariffs on the EU beginning June 1st and 25% tariffs on Apple.
In 5 days, the S&P 500 has erased -$1.5 trillion of market cap.
What's next? Here's why you NEED to watch the bond market.
(a thread) pic.twitter.com/8np3sevfA7
— The Kobeissi Letter (@KobeissiLetter) May 23, 2025
In the crypto segment, the liquidation heat map highlights a market divided between selling pressure and recovery attempts. The current dynamic reflects an unstable balance between fear and the pursuit of recovery.
The scenario remains volatile. If the tariff threat evolves into a broader trade dispute, risk assets — including crypto assets — may face additional pressures. Investors are closely monitoring possible reactions from the European Union and any signs of reopening negotiations.
Crypto Liquidation Heat Map. Source: Coinglass
In the last 24 hours, 162,419 traders were liquidated, totaling $567.65 million, according to market data. Although crypto assets often serve as a hedge during periods of stress in traditional markets, recent movements demonstrate that the sector is not immune to impacts caused by global political decisions.
With the escalation of geopolitical tensions, volatility may remain high in the coming days.
The article Trump's tariff threat against the EU causes sharp drop in the crypto market was first seen on BeInCrypto Brazil.
