Crypto prices sold off sharply after President Donald Trump’s new tariff proposal on European imports reignited fears around global trade. TradingView data showed total crypto market capitalization falling 1.16% to $3.1 trillion, wiping out nearly $34 billion in just eight hours. Bitcoin led the decline and dropped below $93,000 as selling pressure picked up quickly.
The move was not limited to digital assets. U.S. equities also turned lower on tariff concerns, with futures tied to the S&P 500, Nasdaq 100, and Dow Jones all in the red. At the same time, precious metals moved the other way. Gold climbed to about $4,660, while silver reached the $94 area, reflecting a shift toward traditional safe-haven assets.
Tariff proposal on Europe triggered the market reaction
The sell-off followed Trump’s January 18 announcement of a new tariff plan targeting European goods. The proposal calls for a 10% tariff starting on February 1 for imports from eight European countries, including Germany, France, the UK, and the Netherlands. If negotiations fail to deliver terms favorable to Washington, the rate would rise to 25% on June 1.
European leaders condemned the proposal as coercive and destabilizing. The EU held an emergency meeting and at one stage decided to prepare retaliation of up to 100% before agreeing to enter talks. French President Emmanuel Macron also called on the bloc to activate its “anti-coercion instrument,” a policy tool designed to answer what he described as economic pressure.
The report said that instrument has not been deployed, but potential measures could include restricting U.S. access to EU markets, blocking U.S. banks from union contracts, and targeting major American technology companies. As those trade tensions intensified, investors cut exposure to risk assets and rotated into defensive trades.
Liquidations accelerated the drop across crypto
Derivatives pressure added to the downside. More than $680 million in crypto long positions were liquidated within hours, according to the report. Weak momentum in derivatives, thin liquidity, and heavy leverage combined to force a wave of liquidations that pushed prices down even faster.
Sharp corrections of this kind are not unusual in crypto. CoinMetrics historical data cited in the article showed that nearly 70% of crypto market declines greater than 4% during 2021 to 2022 recovered within a week. That does not settle the question of where prices go next, but it does show how quickly leveraged markets can unwind and rebound.
Stocks weakened while metals absorbed safe-haven demand
Broader markets reflected the same defensive tone. U.S. stock futures moved lower as investors priced in the possibility of higher costs, weaker profits, and rising geopolitical tension. European markets were also under pressure.
Precious metals, by contrast, continued to attract safe-haven flows. The original report argued that volatility is likely to remain elevated as long as Trump’s tariff plans dominate headlines. Whether this move proves to be a short-lived reset or the start of a deeper stretch of instability will depend on how trade negotiations develop in the coming weeks.