- Bitcoin dropped nearly 10%, falling below $85,000, while altcoins saw steeper declines.
- Trump’s US Crypto Strategic Reserve announcement led to initial gains, but skepticism triggered a sell-off.
- New US tariffs on China, Canada, and Mexico worsened economic uncertainty, fueling market volatility.
The cryptocurrency market witnessed a sharp correction after a brief rally fueled by former President Donald Trump‘s announcement of a US Crypto Strategic Reserve.
Adding to the sell-off, Trump’s new 25% tariffs on Canada and Mexico, along with an increased 20% tariff on China, have heightened economic fears. The uncertainty surrounding these tariffs has spooked investors, causing liquidity concerns in the crypto market.
Crypto Chaos: Bitcoin Crashes Amid Economic Uncertainty
Bitcoin and the broader cryptocurrency market are experiencing one of the steepest drops in months. While the initial excitement over Trump’s crypto reserve boosted investor confidence, the lack of clarity on its implementation quickly led to a wave of profit-taking. This, combined with fears of tighter regulations, has driven Bitcoin’s price down to the $82,000-$85,000 range.
Solana, Ethereum, and other major altcoins have faced even steeper declines, with Ethereum dropping to nearly $2,000. The sell-off is exacerbated by large liquidations on exchanges like Bybit, where over $1 billion in leveraged positions have been wiped out. The lack of liquidity and rising inflation concerns have further intensified market pressure.
Adding to the turmoil, economic uncertainty stemming from Trump’s tariff policies has sent shockwaves across financial markets. The proposed 25% tariff on Canada and Mexico, along with a 20% increase on Chinese imports, has dampened risk appetite. Investors are now closely watching how these policies unfold, as they could impact global trade and financial markets.
Despite the market downturn, analysts caution against panic selling. While Bitcoin could drop to $70,000 in a worst-case scenario, resistance at $92,000 suggests the potential for a rebound. Many experts believe that long-term crypto adoption remains strong, and this correction may present buying opportunities for investors.
While the crypto market faces turbulence, long-term investors are urged to stay cautious but not fearful. Market cycles of volatility are common, and regulatory clarity will be key to shaping the next phase of crypto growth.
“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes
