Markets correct due to EU tariff fears – Bitcoin falls over 2% and XRP down over 3%

What seemed to be a calm weekend on financial markets has turned into a bloodbath, where the top ten cryptos by market cap, except stablecoins, are now trading in the red over the past hour. Bitcoin dropped below $109,000 minutes after US President Donald Trump threatened to slap the European Union with new tariff rates. 

Just weeks after “successful talks” with China, the President turned his focus to the EU with an abrupt statement that caused panic across the crypto market.

Wow.

Trump says EU talks are going nowhere and they will have a 50% tariff starting June 1. pic.twitter.com/94ntHDpEa4

— Geiger Capital (@Geiger_Capital) May 23, 2025

In a Truth Social post published Friday at around 7:00 AM Eastern Time, the US President claimed the bloc has been taking advantage of the United States. 

“The European Union… has been very difficult to deal with,” he wrote. “Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% tariff on the EU, starting on June 1.”

The proposed tariff is more than double the size of the previous 20% levy that was briefly imposed in April but paused for negotiation. The tariff pause is set to expire on July 9, and aside from a new agreement with the United Kingdom, no major progress has been reported in transatlantic trade talks.

Crypto assets bleed to tariff threat

Bitcoin, which had recently pulled back slightly after setting a new all-time high of $113,000, slumped more than 2.5% in the aftermath of the tariff announcement. The world’s largest crypto fell below the $109,000 mark and is now changing hands at $108,526 at the time of press.

XRP investors also saw losses, down over 3.5% on the day. The coin had been consolidating under the $2.6 resistance zone but failed to maintain momentum after the broader market fell apart. 

🚨 $XRP: Price Spike Down – 5MIN Chart!#XRP #okx More signals on our Telegram (link in bio)! pic.twitter.com/aWwLPF3spS

— Crypto Signals (@crypto_signals) May 23, 2025

Earlier in the day, the coin’s low volatility seemed to be masking an accumulation phase, with analysts mentioning that a successful breach of the $2.6 resistance could drive the price toward $3, but it’s less than likely to happen now.

Bullish technical indicators and a flat trend had hinted at an impending rally, but the sudden shock has dragged prices lower.

In total, over $500 million in leveraged positions were liquidated in less than 24 hours, according to data from CoinGlass. More than 150,000 traders were impacted, with many positions wiped out in the abrupt correction. 

Markets correction caused by EU tariff threat

According to Michael van de Poppe, founder of MNCapital, the crypto market correction was caused by renewed EU tariff fears. 

“Markets correct due to the potential tariffs on the EU,” he said. “That provides a dip opportunity on Bitcoin and altcoins. We’ve already seen those panic moments… can provide tremendous returns in the short term.”

Among other altcoins in the top ten market cap rank, Ethereum fared almost worst within the hour of the development. 

Solana had also experienced a rally that saw its price nearly double from a bottom of $95 to reach $186 but is now showing signs of fatigue, falling to $117 at the time of this publication. 

Meanwhile, in the same social media post recommending a hike in EU tariffs, President Trump demanded Apple and its CEO Tim Cook to bring its iPhone manufacturing operations back to US soil.

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the US will be manufactured and built in the US, not India or anyplace else,” the President said. “If that’s not the case, a tariff of at least 25% must be paid by Apple.”

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