Trade War Headlines Trigger $800M In Liquidations Overnight: Longs Get Wiped Out Across Crypto Markets

Overview

The crypto market experienced a significant selloff overnight, primarily driven by renewed fears of trade conflicts between the United States and the European Union. This development led to the liquidation of over $800 million in leveraged positions, particularly impacting long positions across various digital assets.

Trade Conflict Fears Impact Crypto Markets

The selloff was triggered by fresh tariff headlines and the potential for escalating economic retaliation between the U.S. and the EU. As a result, Bitcoin and major altcoins reversed their recent gains, demonstrating how digital assets can respond to macroeconomic uncertainties similarly to high-beta risk trades. Analyst Darkfost highlighted that the liquidation impact was both immediate and severe, with approximately $768 million attributed to long liquidations.

The scale of these liquidations indicates that many traders were positioned for further price increases but were caught off guard when prices fell sharply. Notably, Hyperliquid reported the largest share of forced liquidations at around $241 million, while Bybit followed closely with approximately $220 million. This wave of liquidations was closely tied to new tariffs targeting Europe, which reignited the broader narrative of a “trade war” across markets.

CME Trading Opens the Door to Volatility

Darkfost pointed out that the timing of the selloff was as critical as the liquidation size. A sharp downside move in Bitcoin occurred as soon as CME trading opened, indicating that institutional flows and macro-linked positioning significantly influenced the market’s reaction. Historically, the CME open has acted as a volatility trigger during past risk-off episodes, particularly when markets are fragile and leverage is high across major exchanges.

The next few hours following the selloff are crucial. Similar movements could occur at the opening of U.S. markets, where liquidity conditions and sensitivity to headlines may amplify market reactions. If selling pressure continues, the market could witness another wave of forced closures, particularly among high-beta altcoins that remain vulnerable after the overnight liquidation event.

Bitcoin’s Fragile Rebound

Currently, Bitcoin is trading near a specific price point after facing resistance in the $96,000 to $97,000 range. The price action indicates that Bitcoin is struggling to regain momentum below key moving averages, with a declining trendline overhead. While the price is forming higher lows after a significant drop from a much higher level, the rebound remains precarious as long as Bitcoin fails to reclaim the mid-$90,000s decisively.

The recent price candles have shown hesitation, with indications of aggressive selling during strength. A long-term moving average, which is rising near the low-$90,000s, could act as a potential dynamic support zone. If Bitcoin can maintain its position above this level, it may help sustain a recovery structure and prevent further downward pressure toward previous liquidity pockets.

From author

The current market dynamics emphasize the critical relationship between macroeconomic factors and cryptocurrency performance. The recent selloff serves as a reminder of how quickly sentiment can shift in response to geopolitical events. Traders should remain vigilant as the market navigates this uncertain landscape, where external factors can lead to rapid changes in momentum.

Impact on the crypto market

• Over $800 million in leveraged positions were liquidated, highlighting the volatility within the crypto market.
• The selloff reflects how closely digital assets can mirror traditional risk trades amid macroeconomic uncertainty.
• Major exchanges like Hyperliquid and Bybit experienced significant forced liquidations, indicating concentrated risk in certain platforms.
• The timing of market movements, particularly at CME openings, underscores the importance of institutional flows in shaping price action.
• Bitcoin’s struggle to reclaim key resistance levels suggests that altcoins may also face challenges in sustaining rallies.
• The ongoing trade conflict narrative could lead to further volatility in the crypto market, necessitating cautious trading strategies.