The cryptocurrency market is experiencing a massive downturn, with Bitcoin, Ethereum, Solana, and other major tokens witnessing sharp declines. In just 24 hours, Bitcoin plunged by 8.83%, now trading at $83,461.02, while Ethereum shed 11.14% of its value. The sudden drop left investors rattled, wondering what triggered this unexpected crash.
Let’s break down the key reasons behind this steep decline.
Trump’s Crypto Reserve: A Short-Lived Surge
Earlier, the market saw a surge following Donald Trump’s announcement of a U.S. Crypto Strategic Reserve. The news initially fueled optimism, pushing Bitcoin and altcoins like XRP, Solana, and Cardano higher. However, this excitement was short-lived as doubts over the feasibility and regulatory approval of such a reserve emerged.
The uncertainty led to massive sell-offs, resulting in a liquidation spree worth $120 million in just one hour. With traders scrambling to adjust their positions, volatility spiked, further accelerating the downward spiral.
Trade War Fears: Tariffs Spark Panic
Adding fuel to the fire, Trump’s new tariff announcement rattled global markets. He declared a 25% tariff on imports from Mexico and Canada, while also doubling tariffs on Chinese goods to 20%.
China swiftly retaliated, slapping an additional 10%-15% tariff on U.S. imports, escalating fears of a full-blown trade war. This geopolitical tension made investors retreat from riskier assets, including cryptocurrencies, pushing prices lower.
As Avinash Shekhar, Co-Founder & CEO of Pi42, pointed out:
“Trump’s proposed tariffs against China intensified economic uncertainty, triggering a broader market sell-off.”
How Are Major Cryptos Performing?
- Bitcoin: -8.83% ($83,461.02)
- Ethereum: -11.14%
- XRP: -10.60%
- Solana: -14.53%
- Cardano: -15.97%
Meanwhile, the total crypto market volume dropped by 9.70% to $180.01 billion in a single day.
What Lies Ahead?
The crypto market remains highly sensitive to policy shifts and economic developments. While the idea of a government-backed crypto reserve created a momentary bullish sentiment, the lack of clarity on execution left the market vulnerable.
Additionally, ongoing fund outflows indicate that investors are treading cautiously amid regulatory uncertainty and macroeconomic risks. Until a clearer framework emerges, volatility in the crypto space is likely to persist.
For now, traders and investors must brace for more turbulence as global policies continue to shape the future of digital assets. 🚀📉