Bitcoin Crashed Below $65,000 as Trump's 15% Tariff Went Live and $500 Million Got Liquidated

Another Week, Another Crash

Bitcoin broke below $65,000 early Monday, falling as much as 4.6% in under two hours during Asian trading. The price dropped from approximately $67,600 to a low of $64,300 before recovering slightly to around $65,700. The move wiped out more than $500 million in leveraged positions across crypto markets, according to CoinGlass data, with the bulk of liquidations concentrated in long positions from traders who had been betting on a bounce.

The trigger was straightforward: Trump's 15% global tariff under Section 122 of the Trade Act of 1974 officially took effect today, February 24. While markets had known about the tariff since Trump's announcement on February 21, the formal implementation created a fresh wave of risk-off sentiment. Thin liquidity during Asian trading hours amplified the move, turning a modest sell-off into a support-level break.

Ethereum fared worse, dropping 3.2% to $1,880. ETH has now fallen below the $1,900 level that many traders had identified as a critical support zone. The broader crypto market capitalization has shrunk to approximately $2.1 trillion, down from over $3.4 trillion at the start of the year.

The Tariff Connection

The relationship between trade policy and crypto prices has become one of the defining dynamics of 2026. Since Trump's inauguration, the total crypto market cap has dropped by $1.3 trillion. That's not all tariff-related, but the correlation is unmistakable: every major tariff escalation has been followed by a crypto sell-off, and every de-escalation signal has produced a bounce.

The Section 122 tariffs specifically affect crypto through several channels. First, tariffs are inflationary, which pushes the Fed to keep rates higher for longer. Higher rates make risk-free assets (Treasury bonds) more attractive relative to speculative assets like crypto. Second, tariff uncertainty suppresses business confidence and risk appetite broadly, and crypto is the highest-beta risk asset class. Third, tariffs strengthen the dollar (at least in the short term), which historically correlates with crypto weakness.

The Supreme Court's decision to strike down the IEEPA tariffs on February 20 briefly looked like it might be bullish for crypto. But Trump's same-day replacement tariffs under Section 122, followed by the hike to 15%, eliminated any relief rally before it could materialize.

Vitalik Is Selling

Adding to the negative sentiment around Ethereum specifically, on-chain data revealed that Vitalik Buterin sold 1,869 ETH worth approximately $3.67 million over the past two days. During the same period, Ethereum's price slipped from $1,988 to $1,875, a decline of roughly 5.7%.

Vitalik selling ETH isn't inherently alarming; he has sold tokens periodically to fund Ethereum Foundation operations and personal philanthropy. But the timing, during the worst ETH performance in a decade, sends a signal whether intended or not. When the co-creator of an asset is reducing exposure while the price is cratering, it doesn't inspire confidence among retail holders who are already nervous.

The ETH-to-BTC ratio continues to deteriorate, with Ethereum underperforming Bitcoin on virtually every timeframe in 2026. This raises questions about whether the "flippening" narrative that dominated 2024 is permanently dead, or just deeply dormant.

Half a Trillion in Market Cap Gone in 48 Hours

The math of this drawdown is stark. Crypto markets have now lost roughly $500 billion in total market cap since Friday's close. Binance spot trading volumes have reportedly plunged 95% from their January peaks, a sign of extreme capitulation where even active traders have stepped to the sidelines.

The liquidation cascade that accompanied Monday's move followed a familiar pattern: leveraged long positions get forced out as prices fall, their forced selling pushes prices lower, which triggers more liquidations. Over a 24-hour stretch, total liquidations topped $500 million according to CoinGlass, with longs accounting for the vast majority.

Bitcoin ETF outflows have now extended to six consecutive weeks, with institutional investors continuing to reduce crypto allocations rather than buying the dip. The only ETF category seeing inflows has been Solana, which has bucked the trend with modest positive flows.

Token Unlocks Add Pressure

The timing of this crash coincides with a significant week for token unlocks. More than $317 million worth of previously locked tokens are entering circulation in the final week of February. Three major projects are releasing restricted tokens: Jupiter (JUP), Humanity (H), and Grass (GRASS).

Token unlocks create predictable sell pressure because early investors and team members who received locked allocations often sell a portion of their newly liquid holdings. In a healthy market, this sell pressure gets absorbed easily. In a market where sentiment is already at "Extreme Fear" levels and liquidity is thin, token unlocks can amplify downward moves.

Where's the Floor?

The honest answer is nobody knows. Technical analysts point to $60,000 as the next major support level for Bitcoin, based on the 200-week moving average and a cluster of previous support/resistance levels. Below that, $52,000 corresponds to the 2024 pre-halving breakout level.

For Ethereum, the picture is more concerning. ETH at $1,880 is now trading below levels that were considered cheap in late 2023. The next major support zone is around $1,500, which would represent a roughly 75% drawdown from the all-time highs.

The fundamental case for crypto hasn't changed: blockchain networks are processing more transactions than ever, DeFi protocols hold more total value locked than they did a year ago, and institutional infrastructure (custody, trading, settlement) has never been more developed. But in a risk-off environment driven by macro headwinds, fundamentals take a back seat to flows. And right now, the flows are uniformly negative.

ETHDenver is running this week through February 28, and historically the conference has produced announcements that shift Ethereum sentiment. Layer-2 scaling updates and DeFi protocol launches tend to cluster around the event. Whether any announcement this week can overcome the macro headwinds is the key question for the next few days.

The Macro Setup

The macro backdrop is as hostile to crypto as it's been since the 2022 bear market. Fed Governor Waller called a March rate cut a "coin flip" yesterday, effectively killing hopes for near-term monetary easing. The Section 122 tariffs add inflationary pressure. The stock market is selling off. Gold is surging above $5,100 as investors flee to safety.

In this environment, crypto's appeal as a "risk-on" speculative asset works against it. The same leverage and volatility that produced extraordinary gains in 2024 are now producing extraordinary losses. Until either the macro picture improves (rate cuts, tariff resolution) or crypto-specific catalysts emerge (a major institutional adoption announcement, a significant technology breakthrough), the path of least resistance remains down.

For traders, the key levels to watch are $60,000 for Bitcoin and $1,500 for Ethereum. A break below either would likely trigger another wave of liquidations and could mark the true capitulation event that bear markets need to find their bottom.