Trump’s EU Tariff Threat Leads to Sharp Correction in the Crypto Market 

US President Donald Trump announced plans to impose a 50% tariff on all goods imported from the European Union, effective from June 1. The announcement has caused some nervousness in the crypto market, as earlier bullish momentum has corrected. 

The proposed tariffs come in response to what Trump described as persistent trade imbalances and regulatory barriers. He accused the EU of maintaining unfair trade practices that have harmed US businesses.

Long-Short Ratio Shows Market Confusion

Bitcoin dropped to $108,000 following the announcement, down from a session high of $111,000. It has since recovered to around $109,000 but remains under pressure. The overall crypto market is down 4% over the past 24 hours.

Bitcoin price Chart Today. Source: TradingView

Data from Coinglass shows $64.13 million in crypto liquidations over the last four hours. Long positions accounted for $34.05 million, while short positions made up $30.09 million. 

Bitcoin alone saw $24.4 million in liquidations, with Ethereum at $15.16 million.

Meanwhile, Bitcoin’s long-short ratio remains almost equal, which shows a short-term uncertainty in the market’s direction. Yesterday, Bitcoin long positions dominated the charts at 54%. 

Bitcoin Long-Short Ratio Over the Past Month. Source: Coinglass

Solana, XRP, and several altcoins also experienced sharp volatility, reflecting heightened volatility across the board. 

Most altcoins saw a greater wipeout in long positions, suggesting retail traders were caught off guard by the sudden policy shift.

Rising concern over macro volatility

The US-China trade deal earlier this month provided a much-needed boost to the crypto market. It was an indication that the macroeconomic uncertainty might be priced in. However, Trump’s EU threats have injected renewed concerns. 

Analysts warn that the tariff announcement could be the start of broader economic disruption. European stock indices fell sharply, and US tech shares also faced selling pressure. 

The trade war is back:After a brief pause, Trump just threatened 50% tariffs on the EU beginning June 1st and 25% tariffs on Apple.In 5 days, the SP 500 has erased -$1.5 trillion of market cap.What's next? Here's why you NEED to watch the bond market.(a thread) pic.twitter.com/8np3sevfA7

— The Kobeissi Letter (@KobeissiLetter) May 23, 2025

In crypto, the liquidation heatmap reflects a market caught between downward fear and upward retracement attempts.

The situation is fluid. If the tariff threat escalates into a full trade dispute, risk assets, including cryptocurrencies, may face additional headwinds. Traders are watching closely for any EU response or signs of negotiation.

Crypto Liquidations Heatmap. Source: Coinglass

In the past 24 hours, 162,419 traders were liquidated, totaling $567.65 million. While crypto has often acted as a hedge during traditional market stress, today’s moves show it is not immune to global policy shocks.

Volatility may persist as geopolitical uncertainty mounts.