Crypto markets took a sharp hit on Tuesday.

According to analysts, the uncertainty surrounding these trade measures is starting to ripple through digital assets, shaking confidence in Bitcoin (BTC), Ethereum (ETH), XRP, and others.

The damage was swift. Nearly $950 million in long crypto positions were liquidated in just 24 hours, per CoinGlass. Ethereum traders suffered the most, with over $320 million in forced sell-offs, followed by Bitcoin at $277 million. Altcoins like Solana (SOL), XRP, and Dogecoin (DOGE) saw $90 million in combined liquidations, per Coinglass data.

ETH dropped from nearly $4,700 to around $4,400, while Bitcoin fell under $110,000. XRP dipped to $2.90. Panic selling sent trading volumes soaring, with Bitcoin’s daily volatility spiking from 15% to 38% , and Ethereum’s from 41% to 70%.

Tariffs stir up fear

While tariffs don’t directly target crypto—since they apply to physical goods—analysts say they’re fueling indirect pressure through inflation, tighter financial conditions, and declining risk appetite.

"The indirect impacts of the tariffs are significantly more dangerous to crypto than the direct ones, and there is already evidence that some harm is happening. The root problem is that tariffs tend to sap an economy's growth and keep inflation running hot, as the additional tax burden they impose on importers is nearly always passed onto consumers in the form of price hikes. Thus, real wage growth tends to be lower under tariffs than it would be otherwise, which in turn means that potential investors have less disposable income to invest. The consequence is that riskier investments get de-prioritized in many investors' allocations, as there's no longer as much excess capital on hand to commit to plays with an uncertain return," said analyst Alex Carchidi, The Motley Fool.

With U.S. GDP data due August 28 and unemployment figures expected in early September, traders are bracing for more volatility

Flash crash, big liquidations

On-chain analysts also noted a sharp wipeout in Bitcoin positions following a surprise dump over the weekend.

“Yesterday saw one of the largest Bitcoin long liquidation events since Dec 2024, with over $150M in longs wiped out as price moved lower,” as per onchain analytical firm glassnode

The move followed a 24,000 BTC sale (worth roughly $2.7 billion) by early holders during a period of thin Sunday liquidity, triggering a flash crash that wiped out nearly $500 million in leveraged positions within minutes.

“Longs were delivered (per our magic blue dot) on the recent CRASH to $111K. That’s just the sixth long delivering event in the last year, and at 18%, was larger than anything that occurred during the tariff tantrum,” wrote another analyst Frank Fetter.

This story was originally reported by TheStreet on Aug 26, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.