Crypto Markets Plunge as Trump Tariffs Fuel Global Risk-Off Sentiment
👤Jay Robinson ⏲️August 1, 2025
The crypto market faced a sharp sell-off on August 1, 2025, following U.S. President Donald Trump’s sweeping tariff announcements.
Bitcoin plunged to $114,322, Ethereum shed over $168 million in long positions, and altcoins like Solana, Cardano, and Dogecoin fell by up to 8%, as over $700 million in crypto long positions were liquidated in just 24 hours.
The catalyst: an aggressive tariff policy targeting over 60 countries. Trump imposed 10–50% duties on goods from nations including China, Canada, and several Southeast Asian economies.
The sudden move rattled investors already wary of rising inflation and global economic stagnation, causing a domino effect across both traditional and digital financial markets.
Bitcoin, heavily leveraged before the crash, triggered a liquidation cascade once it broke key support levels. Ethereum followed suit, leading the liquidation wave with $168.9 million wiped out. CoinGlass data showed that traders were caught off-guard, and many rushed to exit losing positions, amplifying market volatility.
Risk-Off Sentiment Exposes Altcoin and Stablecoin Fragility
The risk-off sentiment didn’t stop at Bitcoin and Ethereum. Altcoins suffered disproportionately, especially as speculative leverage unwound.
Pudgy Penguins (PENGU) fell after insiders offloaded tokens, Injective (INJ) reversed course post-ETF hype, and Sui (SUI) collapsed after hitting a liquidation cluster.
Even stablecoins weren’t spared. Despite recent regulatory advancements, 43% of CFOs still cite volatility as a top concern in crypto investments. With fears of de-pegging and liquidity risks rising, stablecoins could soon face “bank-run” style panics if confidence continues to erode.
What’s Next: All Eyes on U.S. Jobs Data and Fed Policy
Traders are now watching Friday’s U.S. non-farm payroll data, a crucial indicator that could influence the Federal Reserve’s next move. A soft labor report may reignite risk appetite, but analysts warn that if Bitcoin fails to reclaim the $116K mark soon, it could slide further toward $104K.
With the Nasdaq also dipping nearly 1% and the Dow Jones down on tariff fears, crypto’s correlation with traditional markets has surged. For now, digital assets remain tethered to global macro trends, underscoring their vulnerability amid geopolitical upheaval and economic uncertainty.
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