The cryptocurrency market faced a dramatic downturn on Tuesday, February 26, as fears of renewed global trade tensions triggered a massive sell-off across digital assets. Bitcoin plunged below $92,000, while major altcoins like Solana, XRP, Dogecoin, and Cardano dropped more than 10%. In just 24 hours, over **220,000 traders were liquidated**, with total losses exceeding **$693 million. The entire crypto market shed more than $180 billion in value**, highlighting growing volatility amid shifting macroeconomic sentiment.
This sharp correction follows a period of record-breaking inflows into U.S. spot Bitcoin ETFs and an all-time high near $99,500 just days earlier. Now, analysts are questioning whether the rally had begun to show signs of a bubble—and what lies ahead for investors navigating this turbulent landscape.
Market-Wide Sell-Off Sparks Mass Liquidations
Bitcoin dropped as low as $91,500** during the session, marking a decline of over **6.6%** from recent highs. By Tuesday evening, it was trading around **$91,600, down 6.69% in 24 hours. Ethereum followed closely behind with a nearly 5% drop, settling at approximately $3,302.
However, the pain was far more severe for alternative cryptocurrencies:
- Solana (SOL): Down over 10%
- XRP: Fell more than 13%
- Dogecoin (DOGE): Dropped over 13%
- Cardano (ADA): Slumped nearly 16%
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According to data from Coinglass, the cascade of price movements led to $693 million in total liquidations, affecting nearly 226,600 traders globally. Of that amount:
- Long positions accounted for $587 million in losses
- Short positions saw $106 million wiped out
This imbalance suggests that most leveraged traders were betting on continued price increases—leaving them exposed when sentiment shifted suddenly.
Trump’s Tariff Threats Shake Global Markets
One of the key catalysts behind the selloff was renewed geopolitical tension sparked by statements from President-elect Donald Trump. On Monday, February 25, Trump announced plans to impose:
- A 25% tariff on all goods imported from Mexico and Canada
- A 10% tariff on all products entering the U.S. from China
These proposals signal a potential return to protectionist trade policies, raising concerns about inflation, supply chain disruptions, and broader economic slowdowns.
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While these comments did not directly target cryptocurrencies, they significantly impacted investor psychology. As traditional markets reacted with caution, risk-on assets like crypto became vulnerable to profit-taking and capital rotation into safer instruments.
“Trump’s tariff rhetoric has reignited uncertainty across global financial markets,” said Michael McCarthy, Market Strategist at Moomoo Australia. “Cryptocurrencies, despite their decentralized nature, are not immune to macro shocks—especially when leverage is high and sentiment is fragile.”
Signs of a Bitcoin Bubble?
Recent price action has raised red flags among some analysts who argue that Bitcoin may be exhibiting classic signs of speculative excess.
Just days before the correction, Bitcoin surged past $99,500**, coming within inches of the symbolic **$100,000 milestone. This rally coincided with unprecedented institutional demand.
Data from CoinShares revealed that between November 18 and November 22, U.S. spot Bitcoin ETFs attracted $3.38 billion in weekly inflows—more than double the previous week’s total and the highest on record. Such massive capital inflows suggest strong confidence but also increase the risk of overheating.
“Bitcoin’s current price behavior diverges sharply from any traditional valuation model,” McCarthy noted. “We’re seeing momentum-driven trading rather than fundamentals-based investment—hallmarks of bubble dynamics.”
Volatility Warning Signs Mount
Even before the full-scale selloff, warning signals were visible in derivatives markets.
Coinglass data showed that over $500 million in long positions were liquidated** on Sunday, February 24, as prices began to correct from their peak. Then, during Asian trading hours on Tuesday, another wave of forced selling hit, with more than **$144 million in positions unwound in a short span.
These repeated liquidation events underscore the fragility of highly leveraged positions in volatile markets. They also suggest that future rallies could face stiff resistance near previous highs unless accompanied by sustained buying pressure and improved market depth.
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Frequently Asked Questions (FAQ)
What caused the recent crypto market crash?
The latest downturn was primarily triggered by renewed global trade tensions following statements from President-elect Trump about imposing higher tariffs on imports from Canada, Mexico, and China. These announcements fueled risk-off sentiment across financial markets, leading to profit-taking and leveraged position unwinds in crypto.
How many people were liquidated during the crash?
Approximately 226,600 traders were liquidated within 24 hours, according to Coinglass data. Total liquidation value reached $693 million, with the majority stemming from long (bullish) positions.
Is Bitcoin in a bubble?
While Bitcoin continues to attract strong institutional interest—evidenced by record ETF inflows—its price movement has started to deviate from traditional valuation models. Analysts point to rapid price appreciation, high leverage usage, and momentum-driven trading as potential indicators of speculative behavior.
Which altcoins dropped the most?
Solana (SOL), XRP, Dogecoin (DOGE), and Cardano (ADA) were among the hardest hit. ADA fell nearly 16%, while XRP and DOGE each lost over 13% of their value during the selloff.
Can crypto recover from this dip?
Historically, Bitcoin and other major cryptocurrencies have recovered from sharp corrections, often entering new bull phases afterward. However, recovery depends on macroeconomic conditions, regulatory developments, and sustained investor demand.
Should I buy during a market crash?
Market dips can present strategic entry opportunities for long-term investors—but only if approached with proper risk management. Avoid excessive leverage and consider dollar-cost averaging to reduce exposure to short-term volatility.
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Final Thoughts: Navigating Uncertainty with Discipline
The recent crypto sell-off serves as a stark reminder that digital assets remain deeply intertwined with broader financial trends—even as they evolve into independent asset classes. While innovation in blockchain technology and growing adoption continue to drive long-term value, short-term price movements are still heavily influenced by macro forces, sentiment shifts, and leverage dynamics.
For investors, the key takeaway is clear: understand your risk tolerance, avoid overexposure through leverage, and stay informed about global economic developments that can ripple through markets unexpectedly.
As the dust settles from this correction, one thing is certain—the crypto journey remains as volatile as ever—but also full of opportunity for those prepared to navigate it wisely.