Why Is the Crypto Market Down Today?

Crypto markets slid on Friday as fresh tariff concerns once again discouraged investors. Bitcoin is down over 2% today, trading at $103,700. Smart contract platforms also took a big hit as Solana fell 6.3%, Sui dropped 7.8%, and Avalanche slid 7.3%. Crypto stocks were also affected as Bitdeer (BTDR) sank 8.3% after a big rally, while MicroStrategy (MSTR) dipped 2.7% and Coinbase (COIN) lost 1.3%.

U.S.-China Trade Tensions Startle Crypto Markets

The rising U.S.-China tensions are back in focus after a brief truce earlier this month. President Trump accused China of violating the tariff agreement, while Treasury Secretary Scott Bessent said in a Fox interview that trade talks with Chinese representatives had “stalled.”

In response, China called on the U.S. to “immediately correct its erroneous actions and cease discriminatory restrictions,” according to the BBC. Earlier, the easing of tensions had fueled a rally in risk assets like Bitcoin, but the renewed conflict could now erase those gains.

Memecoins See Sharp Pullback

Bitcoin has dropped 6% over the past week. Whale activity shows signs of a comeback, but technical signals are still flashing warning signs. A death cross also looms for Bitcoin, and if it falls below the $104,584 support, it could slide further toward $100,694. Bulls need to reclaim $106,726 to regain control and prevent deeper losses.

Memecoins also saw a sharp pullback, with over $10 billion wiped from their market cap in just seven days. It dropped from $74 billion to $64 billion, which is the lowest since May 9. Over $11.4 billion in Bitcoin and Ethereum options were to expire yesterday, which had a major impact on their short-term price action.

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Open Interest Drops, Liquidations Hit $800M

The Fear and Greed Index has also dropped from 74 to 69, a three-week low. Over 217,000 traders were liquidated recently, with over $800 million in total liquidations across the crypto market. Over the past 24 hours, there have been $716 million in total liquidations. 

Bitcoin futures saw a $3.7 billion drop in open interest as BTC fell from $108,000 to $104,500. This sharp pullback signals a healthy reset, clearing out overleveraged positions and cooling market hype.

While Bitcoin could soon dip to $100,000, however, data shows that a drop below that level could be short-lived. CryptoQuant’s Net Realized Profit/Loss (NRPL) chart shows there is only mild profit-taking, which is far less than the sell-offs seen at market tops in 2024. This hints that the market isn’t overheated and Bitcoin’s uptrend may still have room to run.

If Bitcoin drops below $100,000, the $96,000 would be a key support level attracting buyers and limiting further drops. Trader Altcoin Sherpa points to a strong support zone between $102K–$104.5K and expects a bounce that could push Bitcoin above $107K in the coming days.

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