The crypto markets faced a brutal correction, with major tokens plunging over 25% as investors reacted to fresh U.S. tariffs on Canada and Mexico. The market-wide sell-off wiped out months of gains, bringing prices back to pre-U.S. election levels from early November.

XRP, Dogecoin, and ADA Lead Declines

XRP, Dogecoin (DOGE), and Cardano’s ADA saw some of the sharpest declines, losing more than 25% in the past 24 hours. Data shows that most major cryptocurrencies have dropped 40-50% in the past month, marking one of the steepest downturns in recent years.

The overall crypto market capitalization fell by 12%, its worst daily decline in over a year. The CoinDesk 20 (CD20), a broad market index, lost 10%, while Bitcoin (BTC) shed 6%, showing relative resilience compared to altcoins.

$2.2 Billion Liquidated in 24 Hours

The futures market reflected the turmoil, with crypto traders facing record liquidations. Over $2.2 billion worth of positions were wiped out, making it the biggest liquidation event of the year.

• Ethereum (ETH)-tracked futures lost over $600 million, primarily during early Asian trading hours.
• XRP and DOGE combined saw $150 million in liquidations.
• Altcoin-tracked products lost $138 million.
• A single Binance tether-margined ETH trade worth $25 million was the largest liquidation order recorded.

“Ethereum’s 20% drop over the weekend shocked the market, behaving like an altcoin on the downside due to a lack of institutional inflows,” said Augustine Fan, head of insights at SignalPlus. He added that markets remain in full “risk-off” mode ahead of the U.S. equity market opening.

U.S. Tariffs Trigger Market Panic

The primary catalyst behind this sharp correction was the U.S. government’s decision to impose 25% tariffs on Canadian and Mexican imports. The move has heightened fears of a broader trade war, with both affected nations threatening retaliatory tariffs.

Financial markets reacted negatively, with concerns over increased costs for goods impacting industries ranging from automotive to agriculture. Analysts warn that prolonged trade tensions could slow economic growth, reduce consumer spending, and increase job uncertainty.

What’s Next for Crypto?

Traders remain cautious as market sentiment deteriorates. The massive wave of liquidations suggests that leveraged positions have been flushed out, but uncertainty lingers.

With risk assets under pressure, Bitcoin’s relative stability could offer some support, though altcoins remain vulnerable to further downside. If global trade tensions escalate, the crypto market may see prolonged volatility in the weeks ahead.