Bitcoin (BTC) and US stock markets all sold off sharply

After US President Donald Trump shook up financial markets by announcing a list of reciprocal tariffs on several countries.

US stock markets and Bitcoin (BTC) sold off sharply after President Donald Trump announced a list of reciprocal tariffs on several countries, shaking up financial markets.

The S&P 500 saw a 4.2% drop at market open, its most significant single-day decline since June 2020. The Dow Jones Industrial Average fell 3.41%, to 40,785.41 from 42,225.32, while the Nasdaq Composite dropped 5.23%. Overall, $1.6 trillion in value was wiped out from US stock at the market open.

The move comes as the US is facing increasing economic pressure, with rising inflation and interest rates weighing on investor sentiment. The tariffs are expected to further escalate trade tensions and could have a knock-on effect on global markets.

Bitcoin also sold off sharply, dropping by 8% over the past 24 hours. The flagship cryptocurrency is now trading at around $79,000, down from highs of over $83,000 earlier this week.

The steep declines in both BTC and US stocks are a measure of the uncertainty surrounding the new tariffs and amplify investor concerns about an impending recession.

"The market is pricing in a perfect storm of bad news, with the threat of recession looming large. Investors are pulling back sharply from risk assets and prefer to wait on the sidelines to see how the situation unfolds," said Sebastien Cha كاميراier, market analyst at IG.

The total crypto market has dropped 6.8% over the past 24 hours, according to data from CoinGecko. It seems unlikely that a relief rally is viable in the short term.

Crypto liquidations soar to $573M

According to CoinGlass, in the past 24 hours, more than 200,000 traders were liquidated, with the total amount exceeding $573.4 million. The largest liquidation occurred on Binance, with an ETH/USDT position worth $11.97 million being force closed.

Meanwhile, Bitcoin's open interest dropped below $50 billion, reducing market leverage.

Discussing the implications of this shift, Joao Wedson, CEO of Alphractal, mentioned that the liquidation heatmaps indicate heavy leverage around $80,000. This could lead to a potential drop to $64K-$65K if Bitcoin breaks this level with high trading volume.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.