Bitcoin Price Faces Pressure as Crypto Markets See $2 Billion Liquidation

The crypto market experienced a $2 billion liquidation on Monday, causing Bitcoin price to drop. However, some analysts suggest the reaction was exaggerated.

CoinChapter – China has imposed a 10% tariff on US crude oil and agricultural machinery, while coal and LNG will be subject to a 15% tariff. This move comes in response to the US tariffs on Chinese imports, escalating tensions and impacting Bitcoin price and the crypto markets with increased volatility.

The US-China trade war has intensified as President Donald Trump reintroduced stringent trade policies targeting Chinese goods. Initially, the crypto market reacted with a sharp downturn, but some analysts believe the impact may not be as severe as anticipated.

Bitcoin Price Faces Pressure as Crypto Markets See $2 Billion Liquidation

There was a crypto market liquidation of $2 billion on Monday, affecting Bitcoin price and leading to a downturn. However, some analysts suggest that the reaction was exaggerated. Crypto Lark Davis highlighted that the US imports in the affected sectors, relative to the total consumption, are limited.

“China imports 6% of its LNG from the USA (4 million tons vs the 87 million tons exported globally in 2024). The US exports about 6% of its coal to China. Agricultural equipment numbers are unclear, but the impact appears small. This is not comparable to trade disputes with Mexico or Canada,”

Davis stated.

Traders on X noted that selling Bitcoin in response to the tariffs could be a short-term reaction. Borovik, a well-known market analyst, also commented on the matter, stating that crypto markets usually recover quickly from such events.

Bitcoin Recovers as US Eases Tariffs on Canada and Mexico

While tensions remain high between the US and China, a temporary easing of tariffs on Canada and Mexico helped propel Bitcoin price. Trump delayed tariffs on Mexico and Canada for 30 days, which are linked to increased border enforcement measures.

Following the announcement, Bitcoin briefly crossed the $100,000 mark, showcasing how crypto markets are affected by global trade policies. However, some analysts remain cautious about further price movements.

Ethereum price also reacted, with Andrew Kang, a market analyst, suggesting that ETH could drop to $2,200-$2,400 if tensions escalate in a US-China trade war.

“Back to $2,200-$2,400 if China trade war is real,”

Kang stated.

At the time of writing, Ethereum price is trading at $2,727, up 8% since the beginning of Tuesday's session.

Crypto Market Volatility Increases as Institutional Investors Observe

Despite the crypto market volatility, some market observers view Bitcoin as a hedge against trade war risks. Robert Kiyosaki highlighted the dips in Bitcoin price as an opportunity, alluding to its historical role as an asset that responds to inflation concerns.

Meanwhile, Jeff Park, from Bitwise Asset Management, emphasizes that despite the fluctuations, Bitcoin is still on an upward trajectory.

“Tariffs might be temporary, but Bitcoin is not only going higher - it's doing so faster,”

Park stated.