Bitcoin Price Drops Amid Trade Tariffs
Bitcoin’s price plunged below $100,000 after new tariffs were imposed on key trade partners by US President Donald Trump. Investors reacted swiftly to the news, and cryptocurrency markets saw significant volatility. On Monday morning in Asia, Bitcoin dropped nearly 7%, reaching a three-week low around $93,543. Meanwhile, Ethereum (ETH) fell by 18% since yesterday, returning to price levels not seen since early November. The sharp decline marked a period of unease in the cryptocurrency sector, which has become increasingly sensitive to broader economic shifts.
Also Read: Bitcoin and Crypto Prices: DeepSeek’s Impact on the Market
Trump’s decision to impose a 25% tariff on imports from Mexico and most Canadian goods, as well as a 10% tariff on Chinese imports, took effect on Tuesday. This development rattled global markets, causing a pullback in risky assets, including cryptocurrencies. Since cryptocurrencies trade 24/7, their prices adjusted quickly in response to the economic uncertainty stemming from the tariffs.
Cryptocurrencies React to Economic Uncertainty
The cryptocurrency market’s response to Trump’s tariff announcement underscores the sector’s sensitivity to global economic events. According to market analysts, tariffs can have far-reaching implications. They could contribute to inflationary pressures and higher interest rates, deterring investors from risk assets like crypto.
Chris Weston, head of research at Pepperstone, highlighted how cryptocurrencies have become a “risk proxy” in times of market uncertainty. He explained, “Crypto is really the only way to express risk over the weekend, and on news like this, crypto resorts to a risk proxy.” Weston’s comments underscore the growing role of digital currencies as a barometer for broader market sentiment, particularly during volatile periods.
Bitcoin, Ethereum, and Solana Prices Decline
Bitcoin’s price, in particular, took a significant hit, dropping to $93,543.49 (A$153,700), representing a 4.8% decline within the last 24 hours. According to CoinGecko data, BTC was down 4.6% compared to its value seven days prior. The global cryptocurrency market felt the brunt of the tariffs, with key digital currencies following Bitcoin’s lead.
Figure 1: Bitcoin Price Volatility in the Recent Time
Ethereum (ETH) was priced at A$4,074.33, a sharp decline of 18.6% over the past 24 hours. ETH’s drop was also noticeable on the weekly chart, with the cryptocurrency losing 19.8% compared to the previous week. This downturn mirrors broader market trends, as Ethereum’s price and performance tend to closely align with the overall market sentiment.
Solana (SOL), another major cryptocurrency, followed a similar pattern, trading at A$309.89. The cryptocurrency faced a 10.1% loss in 24 hours and a 17.4% decrease compared to the last week. While the decline in Solana was less steep than Bitcoin’s, it still signalled a broader market correction that impacted most cryptocurrencies.
Also Read: Dogecoin: A Crypto Revolution or Risk to Financial Stability?
Market Impact and Investor Reactions
President Trump’s executive order on tariffs targeted goods from Canada, Mexico, and China. The White House cited reasons such as drug trafficking and illegal immigration for these actions. While the intention behind the tariffs is to bring pressure on these countries, the market’s reaction has been one of concern. Many financial analysts believe that the tariffs will exacerbate inflation, leading to higher interest rates. As a result, risk assets such as cryptocurrencies are seeing a retreat in investor interest.
Some savvy traders capitalised on the market’s volatility. A smart Ethereum investor managed to make $16 million from a leveraged short position. This highlights how certain traders are able to exploit the price swings brought on by macroeconomic news.
India Reevaluates Cryptocurrency Policies
In response to changing global economic conditions and regulatory pressures, India is rethinking its position on cryptocurrencies. According to Ajay Seth, India’s secretary of economic affairs, the country is reevaluating its stance on digital assets. This shift could signal a larger institutional embrace of cryptocurrencies as the global regulatory landscape evolves.
This statement comes in the wake of President Trump’s establishment of the Working Group on Digital Asset Markets, which aims to integrate cryptocurrency regulation within broader financial systems. Analysts see this as part of a growing trend towards institutional acceptance of digital currencies. If India aligns its policies with this global trend, it could signal a major step forward for cryptocurrency adoption in Asia.
Altcoins to Watch Amid Market Volatility
Despite the downturn in the market, several altcoins have managed to maintain some strength.
- MANTRA (OM): The altcoin has shown resilience in the face of the market correction. Bulls are defending key support levels, and the coin could see a rise to $6.63 if it breaks through resistance.
- Monero (XMR): This privacy-focused cryptocurrency has found strong support around the $225 level. If momentum picks up, Monero could target $265 and $290 in the coming weeks.
- Mantle Token (MNT): MNT has been consolidating between $1.28 and $1.04. If it breaks out of this range, it could rise towards $1.42 and $1.52.
- Gate Token (GT): This token is forming a symmetrical triangle pattern near $22. If it breaks above the downtrend line, it could rally towards $25.96.
Elon Musk’s Blockchain Plan for the US Treasury
Elon Musk continues to push for greater blockchain integration in government systems. Recently, he confirmed plans to put the US Treasury on a blockchain, potentially revolutionising how financial transactions and government budgeting work. Musk’s involvement with Trump’s administration has deepened, with his “Doge department” leading the charge to cut waste in the $6.5 trillion US budget.
Future Outlook for the Cryptocurrency Market
The outlook for the cryptocurrency market remains uncertain as it continues to react to macroeconomic events like trade tariffs and regulatory changes. Bitcoin’s drop below $100,000 and the decline in Ethereum, Solana, and other digital currencies reflect broader concerns about inflation and interest rates. Traders must stay vigilant, as government policies and market sentiment will continue to shape the future of cryptocurrencies. As always, investors should remain cautious during periods of volatility, especially when global economic tensions mount.