Crypto Market Faces Deep Cuts With $550 Billion-Rout: Why Did Bitcoin, Ether Fall Overnight?

Although the market trajectory appears to be relatively rosy on Monday's trade, it was anything but that in the past 48 hours, where the global market witnessed an unprecedented selloff that permeated even the crypto market. Over the weekend, cryptocurrencies witnessed one of the biggest sell-offs that eventually led to $550 billion being wiped off from the crypto market, while many altcoins fell by 50% or more.

According to CoinGlass, around $19 billion in crypto positions were liquidated by Friday afternoon, not too long after Donald Trump's decision to announce a fresh 100% tariff on China. With US markets closed after taking a heavy beating, it didn't take long for the crypto market to see heavy liquidations, with Bitcoin falling from $125,000 levels to $104,000.

Ethereum also slipped as much as 15%, reaching a low of around $3,700. The liquidations in crypto can be entirely linked with Trump's tariff war, which is being played out through social media. It has been extensively reported earlier in the year that crypto traders are annoyed at Donald Trump, which is set to accentuate due to the recent back-and-forth with China.

It didn't take long for crypto to bounce back. In fact, since Friday, the crypto market added over $550 billion in market capitalisation since the Friday bottom, according to Kobeissi Letter. This marked one of the largest and fastest wealth transfers in crypto history and came in the wake of Trump's latest message, where he assured everyone to worry about China.

US futures are already trading with gains due to Trump's latest u-turn on China and it appears the statement has aided crypto market as well. Bitcoin has recovered to $115,000 levels while Ethereum is also back up to $4,100 levels, which is yet another reminder of the volatile nature of the crypto markets.