The cryptocurrency market experienced a sharp downturn following new tariffs announced by former US President Donald Trump, prompting investors to retreat from high-risk assets.
Market Turmoil: Key Cryptocurrencies Hit Hard
- Bitcoin (BTC): The leading cryptocurrency fell 5% to $93,921.93**, briefly dipping to a three-week low of **$91,441.89.
- Ether (ETH): The second-largest crypto asset plummeted 26% to $2,135, marking its steepest single-day drop since May 2021.
- Altcoins: Smaller tokens like DOGE, Solana (SOL), and XRP lost 15–23% of their value.
Causes of the Selloff
The selloff was triggered by Trump’s imposition of tariffs on imports from China, Mexico, and Canada, sparking fears of economic retaliation and market instability. Analysts noted nearly $2 billion in crypto liquidations as investors exited volatile positions.
"The crypto market is balancing on a knife’s edge amid shifting global policies," said Avinash Shekhar, CEO of Pi42. "Bitcoin’s drop below $100,000** tests key support levels at **$95,000 and $90,000. While today’s bearish trend dominates, volatility could quickly reverse into bullish momentum."
Macroeconomic Factors Influencing Crypto
Cryptocurrency valuations remain tied to:
- Investor confidence in regulatory stability.
- Global trade policies impacting risk appetite.
- Speculative rallies, such as Bitcoin’s surge past $100,000 after Trump’s pro-crypto pledges.
Trump’s Crypto Policy Shift
Once a skeptic, Trump later embraced digital assets, vowing to position the US as the "crypto capital of the planet." His January executive order aimed to establish clear crypto regulations within six months, including exploration of a crypto reserve.
👉 How Trump’s policies could reshape crypto markets
FAQs: Crypto Market Volatility
Q: Why did Bitcoin and Ether crash?
A: Trump’s tariffs sparked a broader market selloff, with investors fleeing high-risk assets like cryptocurrencies.
Q: What are the key support levels for Bitcoin?
A: Analysts watch $95,000** and **$90,000 as critical thresholds. A rebound above $100,000 could restore bullish momentum.
Q: How do tariffs affect crypto markets?
A: Trade wars increase economic uncertainty, often driving investors toward safer assets and intensifying crypto volatility.
👉 Strategies to navigate crypto market swings
Outlook: Caution Amid Volatility
While the current downturn reflects macroeconomic tensions, crypto’s inherent volatility means conditions could shift rapidly. Traders are advised to monitor:
- Regulatory developments under the new US administration.
- Global trade tensions and their ripple effects.
- Technical indicators, including support/resistance levels.
Disclaimer: This content is for informational purposes only. Consult financial experts before making investment decisions.
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