The crypto market is 'on fire' as the Trump administration imposes tariffs on imported goods from Canada, Mexico and China, causing Bitcoin prices to plummet to $92,000 and $2 billion to be liquidated.
The crypto market is continuously in the red after US President Donald Trump officially signed an executive order imposing tariffs on imported goods from Canada, Mexico and China. This move has sparked a wave of fierce selling, pushing Bitcoin prices down, dragging a series of altcoins down.
On the morning of February 3, Bitcoin prices plunged to a low of $92,400 and are currently hovering around $94,000, marking a 6% drop in 24 hours. This is the first time BTC has fallen below this threshold after more than two weeks of maintaining prices above $100,000.
Meanwhile, Ethereum's price is even more "miserable", "evaporating" 19.5% of its value in the past 24 hours and is currently fluctuating around $2,500 - the lowest level in nearly three months. ETH even dropped to $2,100 - a level not seen since the August 2024 flash crash - when more than $200 million of ETH was liquidated on DeFi protocols.
The pressure to sell off ETH comes not only from the general negative developments of the market but also from the recent wave of criticism from the community about the Ethereum Foundation continuously dumping ETH instead of choosing more sustainable solutions such as staking or participating in the DeFi ecosystem.
Solana's price is also not immune to the general correction of the whole market, falling more than 7.5% in the past 24 hours, currently trading around $196. Notably, SOL has lost more than 30% of its value in just two weeks since Trump's memecoin launched and "made waves" on the network.
Not only Bitcoin and altcoins have plummeted, but memecoins have also suffered heavy losses in this sell-off. According to the GMCI Solana Memes Index, an index that tracks top memecoins on Solana such as Dogwifhat and Bonk, it has "free-fallen" more than 24% in 24 hours and recorded a decrease of more than 38% in the past week.
Even TRUMP, the "hottest" memecoin in recent days, is not "immune" to the storm. This coin has dropped more than 7% in the past day and "plummeted" more than 30% in the past week and is currently trading around $18.4.
According to data from CoinGecko, 19 of the top 20 memecoins have plunged more than 20% in the past week, dragging down the entire memecoin market. In the past 24 hours alone, the total memecoin capitalization has evaporated 18.5% to $74.6 billion, marking one of the deepest declines since the beginning of 2025.
The sharp decline in the market also saw huge liquidations. According to CoinGlass, there were $2.15 billion in liquidations in the past 24 hours, with $1.83 billion of those being long orders.
The total market capitalization also plunged 11.9% to $3.16 trillion, clearly reflecting the panic of many investors before this correction. Many altcoins have been under strong selling pressure in the past 24 hours, such as FIL, OP, ARB, and a series of other coins in the red
The main reason for this sharp correction in the crypto market comes from the impact of the new tax policy proposed by President Donald Trump. According to the new plan, the United States will impose a tax of up to 25% on all imports from Mexico and most goods from Canada, while imposing a 10% tax on Chinese goods imported into the US, raising concerns about an escalating trade war.
The Trump administration claims that this measure is to address the emergency of the addictive painkiller fentanyl and illegal immigrants. The White House boss asked the three countries to take stronger measures to stop fentanyl from entering the US and control the border. Tensions became more serious when Canada and Mexico announced that they would retaliate, while China threatened to sue the US at the World Trade Organization (WTO).
In the face of this "storm", money is rushing out of risky assets to preserve capital, including the cryptocurrency market.
However, President Donald Trump is not worried at all. On the Truth Social platform, he posted a status in all capital letters: “THIS WILL BE THE GOLDEN ERA OF AMERICA! WILL THERE BE PAIN? MAYBE, MAYBE NOT! BUT WE WILL MAKE AMERICA GREAT AGAIN AND IT WILL ALL BE WORTH THE COST.” This status line further raises concerns that Trump is willing to accept short-term economic losses to pursue long-term goals, and that could mean that the cryptocurrency market will continue to be under pressure in the coming time.
Notably, although the Trump administration has signed an executive order to establish a special working group to study the national digital asset reserve fund initiative and build a legal framework to support the crypto industry, there has not been any move that directly impacts the market as many people expected.
This has made many investors panic, fearing that Trump may "break his promises" on his campaign commitments, pushing the cryptocurrency market into a more "sensitive" state than ever.
However, according to BitWise Chief Strategy Officer Jeff Park, the US import tax policy could cause Bitcoin (BTC) to increase sharply in the long term. He believes that the real goal of this policy is not only to balance the trade balance but also to weaken the US dollar in international transactions, making US exports more competitive.
However, the consequence of this is increased inflation, which has a serious impact on US trading partners. As the currencies of these countries lose value, people will look for safer stores of value such as Bitcoin.
