Market Update 3rd February 2025
By Shika Singh
Bitcoin (BTC) and many altcoins experienced significant losses following US President Donald Trump’s announcement of new trade tariffs on China, Mexico, & Canada.
In the past 24 hours, the cryptocurrency market has seen a massive drop, losing over $400 billion in value.
The dollar surged while equity markets and other currencies dropped after US President Donald Trump made good on his threat to impose tariffs on imports from Canada, Mexico and China.
Bitcoin’s price dropped from over $105,000 to below $98,000, although it bounced back to around $93,000.
The major dip is partly due to fears of economic damage from Trump’s tariffs, which resulted in a global market sell-off.
In derivatives markets, more than $1 billion of bullish crypto positions were liquidated in early Asia hours on Monday, with Ether bets worst affected, according to Coinglass data. That’s the most in a single day since Dec. 9.
Talking about the second largest Cryptocurrency Ether …..Its experiencing steeper losses compared to Bitcoin, Solana, and Ripple due to the expectation that these latter assets are more likely to be included in a digital asset stockpile by the US, benefiting from American-led company involvement.
As a result, Ether’s liquidity is less resilient and more susceptible to volatility, causing it to face more significant price swings compared to its peers.
The second-largest digital asset by market value, fell as much as 27% to $2,135 on Monday morning in Asia before paring losses, according to data compiled by Bloomberg. It was the token’s largest intraday decline in percentage terms since May 2021.
This turmoil caused a sharp decline in altcoins, with XRP dropping 26%, and Solana (SOL) and Dogecoin (DOGE) both seeing notable declines. Many other smaller altcoins experienced even steeper losses.
The fear around these tariffs triggered panic selling, especially for altcoins, as traders sought safer assets.
Over 700,000 traders were liquidated during this market crash, which has led to a “fear” sentiment in the market.
Some analysts believe that Bitcoin could test its lower support level around $90,000 if the downturn continues.
The impact of Trump’s trade war concerns has caused widespread uncertainty in the crypto market, leading to these drastic price changes.
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