Crypto Daybook Americas: The Sea of Red May Not Ebb as Fast as Expected

Crypto Daybook Americas: The Sea of Red May Not Ebb as Fast as Expected

Crypto Market Tumbles as Trump’s Tariffs Spark Renewed Trade War Fears

The cryptocurrency market is experiencing a sharp downturn as risk sentiment takes a hit following U.S. President Donald Trump’s decision to impose steep tariffs on imports from Canada, Mexico, and China. The move, which includes a 25% tariff on Canadian and Mexican goods and a 10% tariff on Chinese imports, has triggered retaliatory measures from these nations, fueling fears of a prolonged trade war.

While some analysts believe Bitcoin (BTC) and other cryptocurrencies will rebound quickly, others caution that the market may face sustained volatility. Macro expert Geo Chen suggests that these tariffs could remain in place for months, potentially escalating if further retaliatory actions unfold. Given the $1.3 trillion in affected trade, the scale of this dispute far exceeds previous tariff wars, raising concerns that the economic fallout may be deeper and longer-lasting.

As markets digest these developments, risk assets like Bitcoin and altcoins continue to struggle, mirroring a broader decline across equities. Traders remain on edge, closely watching for potential policy shifts that could either alleviate or exacerbate the situation.

Crypto Market Plunges as Trump’s Tariffs Reignite Trade War Fears

The cryptocurrency market is experiencing significant losses as risk appetite wanes following U.S. President Donald Trump’s latest tariff decision. On Friday evening, Trump announced a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods, prompting swift retaliatory measures from all three nations. The move has sparked fears of a renewed global trade war, reminiscent of the 2018 dispute, which had lasting effects on financial markets.

Bitcoin (BTC) led the decline, dropping over 10% to $91,695.8, while Ethereum (ETH) fell 22.7% to $2,434.84. The broader cryptocurrency market turned deep red, mirroring a selloff in global equities, with futures on major U.S. stock indices plunging over 1.5%. Even Trump-linked memecoins, such as $TRUMP, which the former president helped launch in January, tumbled over 15% to hit a record low of $16.349.

Tariff Uncertainty Clouds Crypto Sentiment

While some analysts believe Bitcoin and altcoins will quickly recover, others caution that the situation may lead to prolonged market weakness. The consensus was that Trump’s return to office would bring pro-crypto policies and stimulus-driven rallies, but his aggressive tariff stance has caught many off guard. Instead of minor tariffs used as bargaining chips, Trump has suggested further increases if trading partners retaliate, escalating concerns that the conflict could drag on for months.

According to macro trader and Fidenza Macro author Geo Chen, the situation is more severe than in 2018, as the tariffs now affect $1.3 trillion in imports—seven times larger than the first round of the previous trade war. He predicts that tariff-driven volatility may persist for weeks, warning that markets have yet to fully process the economic impact.

Crypto Markets Mirror Broader Economic Uncertainty

Cryptocurrencies, often seen as high-risk assets, are feeling the pressure as investors rush to safer options like the U.S. dollar and gold. The dollar surged to a one-month high, further pressuring BTC and other digital assets. Gold, a traditional safe haven, saw some gains, but the market remains cautious, awaiting further developments.

If tensions continue to escalate, risk assets may face further downside pressure, making Bitcoin’s ability to hold the $90,000 level crucial. Should BTC fail to find support, a deeper correction could unfold, with next major support near $85,000.

Meanwhile, Ethereum’s bearish trend remains intact, with the 50-day EMA nearing a potential “death cross” with the 200-day EMA, a classic bearish signal. ETH must reclaim the $3,300 level to regain bullish momentum, but a break below $2,850 could confirm further downside.

Market Outlook: Will Crypto Recover?

For a bullish reversal, Bitcoin must regain the $100,000 psychological threshold, while Ethereum needs a sustained push above $3,300. However, if risk-off sentiment persists and Trump’s tariffs remain in place or escalate, traders may continue reducing exposure to high-risk assets.

With global markets on edge, crypto traders should brace for heightened volatility in the coming days. The outcome of ongoing negotiations and further retaliatory measures from Canada, Mexico, and China will be key in shaping short-term market sentiment.