- Bitcoin and Ethereum experienced sharp declines to $92,900 and $2,400 respectively, triggered by new tariff announcements.
- President Trump’s administration imposed tariffs of 25% on Canada and Mexico, and 10% on Chinese imports.
- Markets showed partial recovery after Mexico reached a trade deal, with crypto prices rebounding but remaining below previous week’s levels.
- Federal Reserve’s potential rate cuts could be complicated by extended tariffs, affecting crypto market liquidity.
- The U.S. Dollar Index approached 110 before settling at 108.8, reflecting increased safe-haven demand.
Cryptocurrency markets tumbled early Monday as traders responded to the White House’s sweeping tariff announcements targeting North American and Chinese imports. Bitcoin plunged to $92,900 while Ethereum touched $2,400, marking significant declines before U.S. market hours.
The sell-off intensified following the administration’s announcement of a 25% import tax on Canadian and Mexican goods, alongside a 10% levy on Chinese imports. These measures, China/”>announced by the White House, are intended to remain active "until the crisis is alleviated."
Market sentiment improved slightly after Mexico secured a trade agreement, helping cryptocurrencies recover some losses. Bitcoin rebounded to $98,900, while Ethereum climbed back to $2,700, though both remained significantly below their previous week’s values, down 2.3% and 13.6% respectively.
GSR Head of Research Brian Rudick told Decrypt: "Market participants will now have to assume Trump is fully willing to act on all his other proposals. Crypto is generally correlated with traditional assets, so with traditional markets down, it’s no surprise that crypto is getting hit harder."
The situation has particular significance given BRICS-treasury-8572985f41754fe008b98f38180945c3″>Trump’s previous threats to impose 100% tariffs on BRICs nations attempting to reduce U.S. dollar dependency in global trade. This follows January’s brief tariff dispute with Colombia, which was resolved within 48 hours.
Greg Magadini, director of derivatives at Amberdata, explained that these tariffs could counteract the Federal Reserve’s easing measures by effectively reducing market liquidity through increased purchase costs. The Dollar Index (DXY), a key indicator of the U.S. dollar’s strength against major currencies, approached its recent high of 110 before settling at 108.8.
Despite current market turbulence, analysts maintain that fundamental factors supporting cryptocurrency growth remain intact, including improved U.S. regulatory clarity and increasing corporate adoption. The situation remains fluid as presidential discussions with Canadian and Mexican officials continue.
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