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Cryptocurrency markets saw over $1 billion in liquidations as traders faced heavy losses following a sudden market downturn. Data from CoinGlass showed that over 87% of liquidated positions were long bets, with Bitcoin alone accounting for $370 million in liquidations. The sell-off followed U.S. President Donald Trump’s announcement of 25% tariffs on Canada and Mexico, which sent shockwaves across financial markets, causing the S&P 500 to drop nearly 2% in early trading.

Bitcoin, which had climbed to around $93,000 on March 3, plunged to approximately $82,000 after the tariff news broke. Other cryptocurrencies, including Ethereum and Solana, also suffered significant losses, with Ethereum dropping by 10% and Solana by 15%. The broader crypto market cap fell by 8%, erasing around $300 billion in value. CoinGlass data showed that approximately 300,000 traders were liquidated in the last 24 hours, with the largest single liquidation order, valued at $13.4 million, executed on Bitfinex.

The downturn marked a stark reversal from just a day earlier when markets surged by $350 billion in response to Trump’s statement on March 2 about creating a U.S. crypto reserve. He announced the reserve would hold assets like Bitcoin, Ethereum, XRP, Solana, and Cardano, fueling optimism among traders. However, the tariff move led to a rapid sell-off, wiping out those gains. Analysts noted that macroeconomic factors, including the risk of a trade war, outweighed industry developments, such as the Securities and Exchange Commission’s (SEC’s) dismissal of lawsuits against crypto firms in February.

Bitcoin’s price has been declining since its all-time high of $108,786 in January. After initially surging following Trump’s election victory, Bitcoin had already dropped below $80,000 by the end of February, representing a 26% decline. The latest drop has further fueled concerns among investors about market stability. The open interest in Bitcoin’s price action declined by 12% in the past 24 hours, suggesting traders are waiting for more clarity before making further moves.

Market analyst Ki Young Ju, CEO of CryptoQuant, stated that Bitcoin’s bull cycle remains intact despite the downturn. He pointed out that on-chain activity is neutral and fundamentals remain strong, with more mining rigs coming online. He also suggested that the slowdown could persist until sentiment in the U.S. market improves.

Altcoins such as XRP, Solana, and Cardano, which had previously benefited from Trump’s crypto reserve announcement, experienced major losses, with over $150 million in liquidations. Stocks were also affected, with major players like Nvidia and Tesla seeing significant declines, signaling a broader shift away from risk assets. Traders remain cautious as uncertainty continues to shape market movements.