Crypto wobbles into August as Trump's new tariffs trigger risk-off sentiment

The cryptocurrency market experienced a downturn on Friday following President Donald Trump's announcement of revised "reciprocal" tariffs affecting numerous countries. While Bitcoin displayed some resilience, maintaining a stable price, Ethereum, XRP, and Binance Coin each fell by approximately 2%. Bitcoin's price dipped to a low of $114,110.73 overnight, prompting a significant wave of liquidations as traders were forced to sell their holdings to cover debts, further driving prices down. According to CoinGlass, Bitcoin saw around $172 million in liquidations across centralized exchanges within the last 24 hours, while Ethereum experienced liquidations totaling $210 million. This turbulence also impacted crypto-related stocks, with Coinbase suffering the most substantial loss, plummeting 15% after reporting disappointing earnings for the second quarter. Other companies such as Circle, Galaxy Digital, and Bitmine Immersion also reported declines, further contributing to the market's overall volatility. The market sentiment shifted towards caution as Trump's newly imposed tariffs, ranging from 10% to 41%, raised concerns regarding inflation and the Federal Reserve's capacity to lower interest rates. During times of broad market de-risking, cryptocurrencies often take a hit as investors withdraw from high-risk assets. However, some analysts note that Bitcoin and Ethereum are seeing support from technical resilience and institutional interest. Ben Kurland, CEO of the crypto research platform DYOR, remarked, "After running red hot in July, this is a healthy strategic cooldown. Markets aren't reacting to a crisis; they're responding to the lack of one. With no new macro catalyst in sight, capital is flowing out of speculative assets and into safer investments, marking a calculated pause." Despite a successful July where Bitcoin gained 8% and Ethereum surged over 49%, the outlook for August appears uncertain, especially given the historical trend of lower trading volumes and heightened volatility during this month. Ethereum ETFs attracted over $5 billion in inflows during July alone, while Bitcoin ETFs saw around $6 billion in monthly inflows, although the final trading session of July recorded $114 million in outflows for Bitcoin.