Crypto markets have tanked around 4% over the past few hours, with total capitalization falling to a three-week low of $2.74 trillion.

Around $150 billion left spot markets while almost 170,000 traders were liquidated, with total liquidations exceeding $500 million, according to CoinGlass.

Bitcoin prices tanked more than 6% from an intraday high of $87,790 to bottom out at $82,277 during early trading in Asia on Thursday morning. However, the asset recovered to reach $83,400 and remains within its range-bound channel at the time of writing.

Trump Tariffs Rattle Markets

The market slump follows US President Donald Trump’s April 2 confirmation of trade tariffs that will impact many countries across the globe.

Trump announced tariffs on 185 countries at once in one of the largest tariff impositions in US history. As a result, SP 500 futures erased around $2 trillion in market cap in under 15 minutes, reported the Kobeissi Letter.

Economists described Trump’s new reciprocal tariff plan as a “tsunami” that will “slam into the global economy and have repercussions that are hard to quantify.”

“This is a game changer, not only for the US economy but for the global economy. Many countries will likely end up in a recession,” said Olu Sonola, head of US economic research at Fitch Ratings.

Trump has hit all countries with a 10% tariff starting April 5, with some countries facing even higher rates, including China, which faces a 34% tariff, Vietnam 46%, the European Union 20%, and Japan 24%.

Describing the announcement as “Liberation Day,” Trump said the new taxes are needed to erase a trade deficit between the US and other countries. Moreover, imports will face both the universal tariff of 10% plus the specific reciprocal import levies targeting each nation.

“Reciprocal. That means they do it to us, and we do it to them,” said Trump.

Trump is set to sign reciprocal tariffs into effect. The executive order is imminent—Liberation Day has arrived! pic.twitter.com/UoaSb1HML2

Altcoin Meltdown

Many of the altcoins are back in bear market territory and have been hit harder than their big brother, as usual.

Ethereum dipped below $1,800 briefly, XRP fell to $2, Binance Coin was sub-$600, and Solana slid below $120.

Analysts pointed out that major corrections are quite common during bull markets, and it shouldn’t be labeled a bear market just because Bitcoin has been trending down for a couple of months.

Its a new #BTC Bear Market because Bitcoin has been in a downtrend for over two months

Bitcoin experienced a -32% downtrend from mid-March 2024 to early September 2024

That pullback was almost 6 months long before price broke to new All Time Highs$BTC #Crypto #Bitcoin