Bitcoin price drops 4% as Trump EU tariff talk liquidates over $300M

Bitcoin experienced a sharp price drop of up to 4%, reaching lows of $107,367 on Bitstamp, following comments from former US President Donald Trump regarding potential tariffs on the European Union. Trump’s announcement, made via Truth Social, stated that discussions with the EU were “going nowhere,” prompting a recommendation for a 50% tariff starting June 1, 2025.

This news triggered immediate market reactions. US stocks, including the S&P 500 and Nasdaq Composite Index, saw declines of 1% and 1.2%, respectively. The crypto market, already attuned to tariff-related volatility, reacted swiftly. Data from CoinGlass revealed significant liquidations, totaling nearly $350 million in 4 hours and over $500 million within a 24-hour period. The majority of liquidations were attributed to long leveraged positions.

Market analysts offered diverse interpretations. Trader Skew highlighted a “flush of long leverage & de-risk selling from spot,” emphasizing the headline-driven nature of the volatility. Daan Crypto Trades noted the uncertainty introduced by the renewed trade tensions, emphasizing the need to observe market behavior and Bitcoin’s performance relative to equities.

The Kobeissi Letter suggested that the Trump administration faced a difficult challenge, needing to balance tariff pressure to avoid unwinding basis trades and suppressing treasury yields without Federal Reserve interest rate cuts. This highlighted the complexities involved in navigating economic policy in a volatile market environment.

Traders focused on key price levels to gauge Bitcoin’s future trajectory. Support levels around $110,000 were identified as crucial for maintaining bullish momentum. Crypto Caesar highlighted the importance of holding this “green zone,” while Poseidon noted the lack of significant resistance above the current price, suggesting potential for further upside. Skew emphasized the $110,000 level as a critical point for market auctioning, vital for continued bullish trends. The overall situation underscores the interconnectedness of global markets and the sensitivity of Bitcoin to macroeconomic events.