Bitcoin corrects to $91,231 early on Monday, dragging down altcoins within the market correction.
President Trump’s tariff announcements usher in a global market crash, influencing Bitcoin and crypto prices.
Derivatives markets note the biggest single-day liquidation, larger than the LUNA-UST collapse of May 2022.
Bitcoin (BTC) slipped to a $91,231 low on Monday, wiping out January’s gains as crypto traders digest US President Donald Trump’s tariff announcements over the weekend and the expectation of inflationary pressures. Derivatives traders took a bigger liquidation hit than the day Terra’s LUNA-UST collapsed in May 2022 and wiped out over $1 billion in leverage from the market. Crypto market 24-hour liquidation | Source: CoinglassUS President Donald Trump’s tariff announcements over the weekend sent shockwaves to global markets, ushering a steep correction in stock markets worldwide. The pan-European STOXX 600 index is down 1.30% at the time of writing on Monday, its biggest one-day slide this year.Nasdaq 100 futures are down 1.61%, the S&P 500 slips 1.36% and the Dow Jones Industrial Average corrects 1.22% early Monday. Bitcoin’s heavy correlation with US stocks and equities dragged down BTC by nearly 3% on the day. BTC’s price plummeted to a low of $91,231 during the Asian session, but it has recovered above $95,000 since then. The worldwide stock and crypto selloff is a response to US President Donald Trump’s tariffs on Canada, Mexico and China, which are likely to fuel a global trade war that could curb economic growth and increase inflationary pressures. Bitcoin’s 30-day Pearson correlation coefficient with the S&P 500, which measures the linear relationship between the two datasets, is 0.76, according to data from The Block. Bitcoin Pearson Correlation (30-day) | Source: The BlockThe 24-hour liquidation in crypto has hit $2.25 billion, according to Coinglass data. This marks a 315% increase in the past day and one of the largest single-day liquidation events in crypto. The Bitcoin funding rate has turned negative, a sign of bearish sentiment among derivatives traders. Data from Derive.xyz shows signs of heightened market volatility. Bitcoin’s 30-day Implied Volatility (IV) climbed up to 54% in the wake of US tariffs and economic uncertainty. BTC/USD Average daily price chart | Source: CoinalyzeNick Forster, Founder at Derive.xyz, told FXStreet in an exclusive interview:
“We expect this volatility to persist as more negative catalysts likely unfold in the coming weeks. BTC has regained its dominance in the market, now accounting for 60%, while ETH has seen its dominance drop to just 10.9% from 17.3% at the start of 2024.
Additionally, several US states, including Illinois, have announced plans for BTC reserves, which is a strong signal of political intent to accelerate crypto adoption. While these measures will take time to bear fruit, we believe they will contribute to a positive long-term
