Bitcoin and many other cryptocurrencies have fallen sharply after the global financial market was shaken by US President Donald Trump's tough import tax policy. The widespread sell-off caused investors to panic, the market lost trillions of dollars in just a few trading sessions.
Bitcoin fell sharply earlier this week
Bitcoin fell below the $78,000 mark in the evening session on Sunday (US time), marking a drop of more than 6% on the day, to $77,730 according to data from Coin Metrics. The digital currency had been trading steadily above $80,000 for most of this year, except for a few minor adjustments. Compared to the peak set in January, Bitcoin has lost about 28% of its value.
The main reason is believed to be the panic of investors in the face of major fluctuations in the global financial market. Specifically, the US stock market just experienced its worst week since 2020, after Mr. Trump announced a series of new import tariffs targeting the world. This raised concerns about a widespread economic recession.
Although often considered an indicator of market sentiment and tends to trade like large tech stocks, Bitcoin held steady at $82,000–$83,000 last week, while stocks and gold both fell. However, the decline was inevitable as the wave of selling increased over the weekend.
Besides Bitcoin, many other major cryptocurrencies were also hit hard. Ethereum (Ether) and the Solana platform token both fell about 12% overnight. This was a deep decline reflecting the widespread pessimism of investors towards risky assets.
The sell-off not only caused prices to fall but also led to a phenomenon called “long liquidation” – that is, traders who bet on the price of the asset to increase were forced to sell their assets when their losses exceeded their tolerance. According to data from CoinGlass, in the past 24 hours, Bitcoin recorded more than $247 million in liquidations in long positions, while Ether also saw $217 million in liquidations.
Individual and institutional investors, who can trade cryptocurrencies 24/7, used the weekend to cut their losses en masse, before the market could continue to be volatile again at the beginning of the new week.
What's Next for Bitcoin?
Donald Trump's aggressive tariffs on all imports - including major trading partners - have raised the risk of a global trade war. Investors fear that this could push the US economy into recession and lead to a global crisis.
In just two trading sessions after the announcement, global stock markets have lost $7.46 trillion in market capitalization, according to the S&P Global Broad Market Index. The US market alone lost $5.87 trillion, while other major markets around the world lost another $1.59 trillion.
Not only stocks were affected, but assets once considered "safe havens" such as gold also fell, showing the level of panic that is gripping global investors.
Since the beginning of 2025, Bitcoin has lost about 15% of its value. In the current context, without any special internal momentum from the cryptocurrency market, Bitcoin is likely to continue to fluctuate in line with the global stock market trend.
This means that if the financial market continues to decline due to recession and trade war concerns, Bitcoin will also be hard-pressed to avoid further declines. Earlier expectations that new regulatory policies could support the cryptocurrency market are now overshadowed by larger concerns from the macro economy.
Analysts believe that without any new boost from technology or pro-crypto policies, Bitcoin will find it difficult to make a strong recovery in the short term.