Cryptocurrencies have experienced a significant downturn following a historic wave of liquidations that ignited a sharp selloff over the weekend. Bitcoin, the leading digital asset by market capitalization, plummeted as much as 3.75%, trading at approximately $111,500 on Tuesday morning in London. Meanwhile, Ether saw an even steeper decline, falling 7.5% below the $4,000 mark, according to data from Bloomberg. Smaller, more volatile tokens suffered even greater losses, contributing to a staggering $150 billion reduction in the overall market value of cryptocurrencies within a 24-hour window, as reported by CoinGecko.
This market slide coincided with increased tensions between the United States and China. China recently imposed restrictions on Hanwha Ocean Co., a major South Korean shipbuilder’s U.S. operations, which is seen as a retaliatory measure against U.S. sanctions targeting the Chinese shipping industry. The tumultuous environment was further exacerbated when former U.S. President Donald Trump threatened to impose additional tariffs on China in light of new export controls.
The cryptocurrency market temporarily recovered on Monday, with some major tokens showing signs of regaining lost ground. However, this respite proved short-lived, as most digital assets resumed their downward trajectory shortly thereafter. The selloff marks a significant recalibration for the crypto market, eliciting investor apprehension reflected in the withdrawal of $756 million from U.S. Bitcoin and Ether exchange-traded funds on the same day.
Analytical firm Glassnode noted in a report that the market appears to be entering a consolidation stage characterized by heightened caution, selective risk-taking, and a more methodical approach to rebuilding investor confidence across both spot and derivatives markets.
