Bitcoin plummeted 4% to $107,367 on May 23 after President Trump announced sweeping 50% tariffs on European Union imports, sparking the largest cryptocurrency liquidation event in months. The digital asset has since recovered to $108,255 but remains well below recent all-time highs above $112,170. Trump’s tariff declaration on Truth Social immediately triggered panic across global markets. “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025,” the President announced. The unexpected escalation in trade tensions sent shockwaves through both traditional and digital asset markets. The cryptocurrency selloff wiped out $563.20 million in futures positions across 160,905 traders within 24 hours, according to CoinGlass data. Long positions accounted for $418.63 million of the liquidations, while shorts represented $144.35 million. The largest single liquidation occurred on OKX, involving a $9.53 million BTC-USDT position. Bitcoin bore the brunt of the liquidations with $153.04 million in erased positions, followed by Ethereum at $144.19 million. The flagship cryptocurrency fell from its peak of $111,970 to the $107,000 range before staging a partial recovery to current levels around $109,231. Traditional markets mirrored the crypto carnage. U.S. equities opened sharply lower with the S&P 500 and Nasdaq dropping 1% and 1.2% respectively. European indices including Germany’s DAX and France’s CAC 40 posted steep declines as investors fled risk assets. Bitcoin Retreats 4% as Trump’s EU Tariff Threat Triggers $560M Liquidation Wave The technical chart reveals Bitcoin trading below the critical $109,372 resistance level, which previously acted as support during the recent rally. Current support levels emerge at $107,252, $106,080, and $104,145, while resistance sits at $110,282, $111,877, and $113,943. The asset trades below key moving averages, signaling continued bearish momentum. Ethereum suffered parallel losses, declining from a daily high of $2,731 to $2,508 before recovering to $2,574. The second-largest cryptocurrency demonstrated less resilience than Bitcoin, trading far below the $4,000 level reached during November’s post-election rally. The tariff announcement represents a significant escalation in Trump’s trade agenda, drawing comparisons to the 2018-2019 trade conflict period that caused similar market volatility. The 50% import tax targets EU automobiles and tech components, including potential penalties on Apple products assembled in Europe. Market analysts note the crypto sector’s heightened sensitivity to geopolitical tensions stems from its risk asset classification. Trade wars typically reduce investor appetite for volatile investments as economic growth concerns mount. The total cryptocurrency market capitalization shed over $130 billion within hours of Trump’s announcement. Despite the sharp correction, Bitcoin maintains relative strength compared to traditional risk assets, reflecting its emerging “digital gold” narrative among institutional investors. The asset’s ability to hold above $107,000 support suggests underlying demand persists despite short-term volatility.