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BTC $96,420 +2.34% ETH $3,280 +1.82% SOL $185.40 -0.92% BNB $642.50 +0.45% XRP $2.18 +3.12% DOGE $0.082 -1.50% ADA $1.05 +0.80% AVAX $42.10 +1.15%
BTC $96,420 +2.34% ETH $3,280 +1.82% SOL $185.40 -0.92% BNB $642.50 +0.45% XRP $2.18 +3.12% DOGE $0.082 -1.50% ADA $1.05 +0.80% AVAX $42.10 +1.15%
10/12/2025

Traders Blame Trump Tariffs for Crypto Market Crash

Santiment: "Retail investors always need a specific event to explain a market downturn." The crypto market saw a sharp selloff on Friday after U.S. President Donald Trump announced 100% tariffs on Chinese goods. Many traders immediately pointed to this as the reason Bitcoin and other digital assets dropped across the board. However, according to analytics platform Santiment, the real cause of the market crash is far more complex. "This is

Traders Blame Trump Tariffs for Crypto Market Crash

Santiment: "Retail investors always need a specific event to rationalize a market downturn."

The crypto market saw a sharp selloff on Friday after U.S. President Donald Trump announced 100% tariffs on Chinese goods. Many traders immediately pointed to this as the reason Bitcoin and other digital assets dropped across the board.

However, according to analytics platform Santiment, the real cause of the market crash is far more complex.

"This is classic retail investor behavior — they typically need a 'single event' to rationalize major crypto market downturns," Santiment said in a Saturday report.

Excessive Leverage — The Real Culprit Behind the Crash

Analysts at The Kobeissi Letter argued that trade tensions were merely the "catalyst," while the root cause was excessive leverage and risk exposure.
Specifically, over the past 24 hours, the market saw $16.7 billion in long positions liquidated compared to just $2.5 billion in short positions — a ratio of nearly 7:1, reflecting a heavily bullish tilt.

Following Trump's announcement, Bitcoin (BTC) fell more than 10%, dropping to a low of around $102,000 on the BTC/USDT pair on Binance. At the time of writing, Bitcoin was trading around $109,910, down more than 10% on the week.

U.S.-China Negotiations Will Be the Key Focus for Crypto Investors

Santiment believes that in the near term, developments between the U.S. and China will play a central role in shaping retail investor sentiment.

"If talks between Trump and Xi Jinping show positive signals, market sentiment will improve.
On the other hand, if tensions escalate, predictions of 'Bitcoin below $100,000' will start flooding in," the report noted.

Santiment also pointed out that amid global political uncertainty, Bitcoin is behaving more like a risk asset than a safe haven.

Market Sentiment Swings from Greed to Fear

According to the latest update, the Crypto Fear & Greed Index — a gauge of market sentiment — plunged to 27 (Fear), its lowest level in nearly six months.
Just one day earlier, the index had been at 64 (Greed), reflecting how quickly investor sentiment reversed following the sharp selloff.

In summary, Bitcoin's recent drop highlights how sensitive the crypto market remains to macroeconomic factors and financial leverage. While many investors look for a specific "culprit" like Trump's tariffs, on-chain data points to overleveraged positions and speculative sentiment as the deeper forces behind the market's turbulence.

📊 Bitcoin is currently trading around $109,910, down 10.06% over the past 7 days.