Donald Trump He announced new tariffs on imports from Canada, Mexico and China during the weekend, which led to cryptocurrency investors to reduce their risk exposure.
As a consequence, Etherthe second largest digital asset in the world, collapsed to a 26.53%and came to quote on the U$ S2.135 on Monday. This was its greatest setback in almost four years and its most pronounced intradication since May 2021.
Trump intensified international tensions by signing an executive order that imposes these new tariffs, a measure that had long threatened and marks a crucial change. This unleashed an international dispute, with each affected country promising reprisals.
Fear of a commercial war unleashes a mass sale in crypto
In response, Bitcoin suffered a strong fall, touching a minimum of U$ S92.460 and losing the u$ S100,000 For the first time since the beginning of January. This collapse was part of a generalized market liquidation, since investors sought safer assets in fear of inflation and economic turbulence derived from the commercial war.
Other cryptocurrencies also suffered significant losses:
- XRP lost 23% of its value,
- Solarium fell 7.5%,
- Dogecoin He sank a 24.5%.
Crypto operators reduced their positions in several tokens after Trump’s announcement.
According to data from Coinglassafter the announcement of the tariffs more than $ 2 billion in Bitcoin immediately. These liquidations affected both long and short positions, but a shocking $ 1,830 million It corresponded to long liquidations, indicating that the bullish traders did not anticipate the strong retreat of the market.
Problems in global trade reduce the demand for Bitcoin and other crypts
Tariffs affect global trade and slow down economic growth, which decreases available income and consumer spending. As a result, investors usually have less capital to allocate cryptocurrencies.
In addition, some commercial policies can strengthen the US dollar, making bitcoin and other assets quoted in dollars for international buyers, which reduces demand.
Cryptocurrencies have also shown a growing correlation with traditional financial markets. Therefore, when commercial tensions cause fluctuations or falls in shares, crypto prices tend to follow the same pattern, reflecting a general change in the feeling of investors.
Analysts are divided on long -term consequences. Some believe that tariffs could weaken the dollar and reduce rates in the US, which would benefit Bitcoin over time. Others warn that the commercial war could generate immediate inflationary pressures and market corrections.
Markus Thielenof 10x ResearchHe pointed out that although Bitcoin was close to a bullish rupture on Friday, the firm of tariffs by Trump caused a market correction.
Thielen added that, although the market had already discounted the tariffs from the February 1its implementation still interrupted the Bitcoin rally and put key levels of technical support at risk.
In addition, although investors were aware of the measure, they had focused more on the saga of Deepseekunderestimating the geopolitical impact and the possibility of retaliation by other international leaders.
Ryan Leechief analyst Bitget Researchhe warned: “While Bitcoin has historically been seen as a refuge in the face of traditional markets, their recent performance shows a growing sensitivity to global economic events. The current reaction underlines how geopolitical tensions and political decisions are increasingly influencing the dynamics of the crypto market. ”
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
