Bitcoin fell 4% on May 23, 2025, as markets reacted to potential Trump-era EU tariffs, which sparked a $300 million liquidation event in crypto derivatives. The decline reflects crypto’s growing correlation with traditional risk assets during geopolitical tensions. Traders likely reduced exposure to hedge against broader market uncertainty stemming from trade policy risks.
The tariff talks revived concerns about global economic growth, strengthening the US dollar and pressuring dollar-denominated assets like Bitcoin. This occurred despite positive on-chain indicators, demonstrating crypto’s sensitivity to macro developments. Derivatives data showed leveraged long positions being unwound, exacerbating the downward move.
However, Bitcoin’s quick rebound above $107,000 suggests strong institutional buying at lower levels. The dip may represent a healthy correction after recent gains, with long-term fundamentals remaining intact. Market participants now watch for tariff implementation details and potential impacts on cross-border crypto flows.
