Crypto market plunges as US–EU trade tensions escalate

Crypto markets plunged as US–EU trade tensions escalated. Bitcoin, Ethereum, and XRP fell over 2.5%, 3%, and 4%, with heavy liquidations and risk aversion driving the downturn.

The cryptocurrency market saw a sharp downturn as Bitcoin, Ethereum, and XRP all posted significant losses. Bitcoin dropped below $93,000, falling over 2.5% in 24 hours. Ethereum and XRP declined by more than 3% and 4%, respectively. The total crypto market capitalization fell by nearly 3%, with over $860 million in leveraged positions liquidated. This sell-off was triggered by escalating trade tensions between the US and the European Union, following new US tariffs on European imports and threats of EU retaliation. The resulting risk aversion led investors to move funds into safe-haven assets like gold and silver, which reached new highs. Technical factors, such as Bitcoin failing to hold key support levels and heavy leverage, contributed to the rapid decline. Despite the sharp drop, blockchain data and market indicators suggest this may be a leverage reset rather than a fundamental shift, with potential for a short-term rebound if global tensions ease.