tl;dr
Bitcoin falls below $112,000 amid escalating trade tensions between China and the U.S., triggering global market sell-offs and highlighting crypto's vulnerability to geopolitical risks.
**Bitcoin Plummets Below $112,000 Amid Escalating Trade Tensions Between China and U.S.**
Bitcoin fell below $112,000 during Tuesday afternoon trading in Hong Kong time, marking another sharp decline in the cryptocurrency market as global investors retreated from risk amid escalating trade tensions between China and the U.S. The drop came after China imposed sanctions on U.S. units of South Korean shipbuilder Hanwha Ocean, reigniting fears of a broader trade conflict just days after both nations had signaled a temporary truce.
The news sent shockwaves through global markets. Asian stocks tumbled, with Japan’s Nikkei 225 plunging over 3%—its worst session in nearly two months. U.S. and European equity futures followed suit, with S&P 500 futures declining 0.7% and Nasdaq 100 futures dropping 1%. The U.S. dollar weakened against the Japanese yen, which reversed earlier losses, while gold and silver prices reversed earlier gains amid heavy selling. Meanwhile, 10-year Treasury yields edged down to 4.03% as investors flocked to safe-haven assets.
Cryptocurrencies, which had briefly rebounded over the weekend, were hit hard. Bitcoin fell 3% to $111,869, while Ethereum dropped 4% to around $4,000. BNB (Binance Coin) suffered a more severe decline, sliding over 10% after outperforming in the previous week. XRP, Solana, and Dogecoin also dropped between 5% and 6% in the past 24 hours.
The volatility underscores the crypto market’s deep entanglement with global macroeconomic risks. Total liquidations across crypto exchanges reached $630 million, with long positions accounting for two-thirds of the losses, according to CoinGlass. This follows a record-breaking $20 billion in derivative liquidations over a 24-hour period earlier in the week, triggered by U.S. President Donald Trump’s threat of a 100% tariff on Chinese imports—a move that sparked the largest crypto liquidation event in history.
The latest sell-off highlights how crypto remains highly sensitive to geopolitical tensions and shifting market sentiment. Despite a brief rebound over the weekend, the market’s rapid reversal underscores its vulnerability to external shocks. Analysts note that the sector’s performance continues to mirror broader financial markets, with investors prioritizing safety amid uncertainty.
As trade conflicts and macroeconomic pressures persist, the crypto market’s path forward remains uncertain. For now, the fallout from China’s sanctions and the specter of renewed U.S.-China friction serve as a stark reminder of the interconnectedness of global markets—and the fragility of even the most speculative assets.