Bitcoin Plunges $4K After Trump’s Global Tariff Announcement

The catalyst for the sudden Bitcoin downturn was a dramatic escalation in U.S. trade policy. The move came after the US Supreme Court ruled that many of the tariffs President Trump imposed over the past year were illegal, determining he improperly used a 1977 emergency law (IEEPA) to levy taxes on imports. In response, President Trump announced a 10% temporary global tariff under a previously unused legal provision, Section 122, before ramping it up to 15% a day later.

This scenario is not unfamiliar to crypto traders. As noted in the source text, a similar pattern unfolded weeks earlier during heightened geopolitical tensions over Greenland, where tariff threats between the US and the EU emerged over a weekend, leaving Bitcoin’s price static until legacy futures markets opened. The same delayed reaction occurred on February 22/23. After a calm weekend, the opening of traditional markets acted as the trigger, causing Bitcoin to slump several thousand dollars within an hour on the Bitstamp exchange.

The immediate market impact was severe. According to data from CoinGlass, the total value of liquidated positions across the cryptocurrency market jumped to almost $500 million. A staggering 90% of these liquidations were long positions, indicating that traders betting on higher prices were caught off-guard by the rapid descent. The altcoin market followed Bitcoin’s lead, with many major alternative cryptocurrencies dropping over 5% in the same timeframe.

With Bitcoin finding tentative support near $66,000 after its flash crash to $64,350, analysts are mapping out potential downside targets. Analyst Ali Martinez, citing Bitcoin’s holder cost basis data, highlighted three critical support levels that could come into play if the sell-off deepens: $58,467, $54,439, and $41,488. These levels represent significant concentrations of investor cost bases, where buying interest might historically emerge to stabilize the price.

Blockchain analytics firm Santiment provided deeper insight into the market structure following the crash. The company reported that Bitcoin’s aggregate open interest—the total value of outstanding derivative contracts—has collapsed to $19.5 billion. This figure is under half of the 2026 peak of $38.3 billion recorded back on January 14, indicating a massive unwinding of leveraged positions and a significant reduction in market speculation.

Interestingly, Santiment also noted a shift in social media sentiment among retail investors, which has “quickly gone into FUD mode.” The firm suggested that this surge in Fear, Uncertainty, and Doubt (FUD) can, from a historical perspective, help propel a quick market rebound. This contrarian indicator suggests that extreme negative sentiment often coincides with local price bottoms, as panicked selling exhausts itself.

The episode underscores Bitcoin’s continued, albeit delayed, sensitivity to macro-economic shocks and policy announcements from key jurisdictions like the United States. While the digital asset market operates 24/7, its deepest liquidity and most significant price discovery often align with the opening of traditional financial markets, creating a volatile bridge between the legacy and crypto economies.