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According to market analyst Michael Van de Poppe, this liquidation event was worse than what happened after the collapse of FTX and Terra LUNA.
The liquidations impacted more than 736,000 traders per Coinglass. Moreover, $1.87 billion were long liquidations that caused forced selling. This, in turn, fuelled a steep downtrend.
Ethereum Sees Worst Drop Since 2021
On 3rd February, the largest altcoin, Ethereum (ETH), fell from above $3,000 to $2,150, marking its biggest single-day loss since 2021. At press time, ETH had recouped some of these losses to trade at $2,584.
Other top ten altcoins also traded lower during the Asian trading session. Ripple’s XRP was down by 17% to trade at $2.27, while Solana dropped below $200 after a 7% loss. BNB Coin (BNB) and Cardano (ADA) also shed 12% and 20, respectively.
 
The largest meme coin Dogecoin (DOGE) had also dropped by 17% to its lowest level in three months. Other meme coins also registered similar losses, with the total meme coin market cap falling by 14% to $11 billion.
Bitcoin (BTC) registered a 4% to trade at around $95,000. However, the king coin’s losses were mild compared to altcoins. This saw Bitcoin’s dominance surge to 64%, its highest level since February 2021.
However, the Bitcoin Fear and Greed Index has dropped from “greed” to “neutral,” pointing towards waning bullish sentiment.
Trump Tariffs Attributed to the Recent Dip
According to Bloomberg, the risk assets selloff follows the tariffs US President Donald Trump announced. Once these tariffs come into effect, they could affect billions of dollars in imports from Canada and Mexico.
The ongoing tariff war could cascade into a trade war that could impact global financial markets. There are also other concerns about stagflation and recession, which is, in turn, forcing traders to sell risk assets.
Trump’s election was instrumental to the rally in late 2024. While he has signed an executive order favoring the cryptocurrency industry, the ongoing tariff discussions have caused the steepest decline in history.
These losses have not just been limited to the crypto industry. At press time, Nasdaq futures were down by 390 points, while the S&P 500 futures were down by 1.46% per Google Finance.
