Cryptocurrency markets suffered one of their biggest declines this year after U.S. President Donald Trump threatened a new round of tariffs on Chinese imports. Analysts called it the largest asset sell-off in cryptocurrency history.

The total cryptocurrency market capitalization fell by more than 9% to approximately $3.8 trillion, resulting in an estimated $200 billion in value lost in a matter of hours.

Bitcoin, which reached a new all-time high earlier this week, surpassing $126,000, was last traded at around $112,013, down 7.6% in the past 24 hours and 8.5% for the week.

Tether remained stable at around $1.00.

Record Liquidations Deepen Cryptocurrency Market Crash
According to data provider Coinglass, over $19 billion in cryptocurrency positions were liquidated in the last 24 hours, affecting over 1.6 million.

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The largest liquidation in cryptocurrency history. 1,618,240 traders were liquidated in the last 24 hours, with a total liquidation amount of $19.13 billion. The actual total is likely much higher, with only one liquidation order reported per second.

$7 billion of this was sold off in less than an hour on Friday as selling pressure spread across all exchanges.

The scale of forced liquidations—caused by automatic margin calls on overleveraged positions—may have been underreported due to exchange reporting limits.

Only one liquidation order per second is reported, potentially masking the true scale of the sell-off.

Market participants say the rout began when Trump announced plans to impose a 100% tariff on Chinese goods and control software exports, sending shockwaves through high-risk assets worldwide.

Bitcoin's fall below $115,000 triggered margin calls and a wave of automated liquidations, further accelerating the decline.

Tentatives Turn Cautious
The sudden change in trend came after a week of heightened optimism that pushed major cryptocurrencies to record highs.

Analysts said the combination of geopolitical tensions, high debt levels, and overheated sentiment created the perfect conditions for a sharp correction.

Despite the sharp decline, some investors see this as a temporary respite.

Futures funding rates have returned to near-neutral levels, and long-term bond holders have shown limited selling activity for now.

Analysts are now watching to see if Bitcoin can hold above the $110,000 support zone.

A sustained break above this level could result in further losses, while stabilization above it could suggest that the worst effects of the forced sell-off have passed.

Volatility is expected to remain elevated in the coming sessions as investors analyze the political shock and await possible Chinese responses.

For now, the euphoric bull market has been abruptly interrupted—not due to cryptocurrency's inherent flaws, but due to the collision of geopolitics with excessive debt.

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