Traders in cryptocurrency derivatives experienced over $1 billion in liquidations within the last 24 hours as apprehensions regarding a potential trade conflict caused markets to plummet, as per information obtained from CoinGlass.
A significant portion, exceeding 87%, of the liquidations originated from long positions following a volatile beginning to March, which witnessed double-digit declines on March 4 that wiped out similarly large profits made just days prior, revealed the data.
On March 4, US President Donald Trump instituted 25% tariffs on Canada and Mexico, the United States’ primary trading allies, causing the S&P 500 stock index to decrease nearly 2% in morning trades.
Bitcoin (BTC) fell to approximately $82,000 after reaching highs near $93,000 on March 3, according to data from Google Finance. Other cryptocurrencies such as Ether (ETH) and Solana (SOL) experienced even steeper declines, plummeting by approximately 12% and 20%, respectively.
The sell-off acted as a bait-and-switch for investors who became optimistic after Trump disclosed plans on March 2 to establish a US crypto reserve that would include tokens like BTC, ETH, XRP (XRP), and Cardano (ADA).
Long positions in Bitcoin accounted for the majority of liquidated assets, totaling over $300 million in the past 24 hours, according to CoinGlass.
At the same time, positions in SOL, XRP, and ADA collectively endured liquidations exceeding $150 million, the data indicated.
Crypto liquidation heatmap. Source: CoinGlass
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These three cryptocurrencies all witnessed substantial gains after Trump announced they would be part of his proposed US crypto reserve.
The tariff upheaval threatens to negate profits from the so-called “Trump effect,” which caused Bitcoin’s price to rise from $69,374 on Election Day (Nov. 5) to an unprecedented $108,786 when the new administration took office on Jan. 20.
Since that period, Bitcoin’s value has primarily declined, falling below $80,000 on Feb. 28 — a reduction of 26%, according to Cointelegraph data.
This liquidation trend signifies that macroeconomic elements — such as a potential trade conflict and a weakening global economy — may overshadow positive industry news, including the US Securities and Exchange Commission’s dismissal of several lawsuits against crypto businesses in February.
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