The cryptocurrency market faced a sharp downturn after the United States President Donald Trump’s tariff announcement sent shockwaves through global finance. Apart from traditional stocks, Bitcoin and Ether, the two largest digital assets, bore the brunt of the selloffs that followed Trump’s announcement, with bitcoin dropping over 11% and Ether plunging by 30%. 
Trump’s decision to impose a 25% tariff on imports from Canada and Mexico and a 10% tariff on Chinese goods. The move, seen as an aggressive trade policy shift by the United States, fueled fears of inflation and economic instability. The tariffs signaled a potential trade war, prompting Canada, Mexico, and China to announce retaliatory measures. This deepened concerns about inflation, which, if it rises, could push the U.S. Federal Reserve to maintain high interest rates.
Markets React
Markets reacted swiftly to the imminent tariff wars, and crypto was no exception.
Generally, higher rates are rarely good news for speculative assets. They increase the appeal of traditional, yield-bearing investments like bonds, while crypto, which thrives in low-interest environments, struggles. With macroeconomic pressures mounting, the market is at a crossroads.
Consequently, within 24 hours, $2.21 billion in liquidations swept through the market, with $1.87 billion of those positions being long bets on rising prices. Traders who had anticipated further gains were forced to exit, driving prices down even further.
For years, bitcoin has been viewed as a hedge against traditional financial turmoil. However, history has shown that during periods of extreme uncertainty—such as the early COVID-19 market panic for example—crypto can become even more volatile rather than a safe haven.
Read also: XRP: Bearish indicators warn of potential 25% price decline in early 2025
Bitcoin and Ether at critical price levels
At the time of writing, bitcoin is trading above the $90,000 support level, an area it has bounced from multiple times in the past. A rebound here could set the stage for a recovery toward $106,000 resistance level. However, if bitcoin loses support and falls below $90,000, selling pressure could accelerate, potentially dragging the price down to $71,000, a level that aligns with past correction cycles.
Ether faces an even more delicate situation. After its 30% decline, Ether is hovering around $2,600, but its real test lies at $2,150. If buyers step in at this historically significant level, Ether could stage a recovery toward $2,800 and potentially $3,500. But failure to hold $2,150 could open the door for a further drop to $2,000 or even $1,750. Read also: Donald Trump’s win, Positive for Ethereum – ConsenSys CEO Joseph Lubin
Bitcoin dominance above 60%
Regardless of the loss of price value, bitcoin dominance has broken above 60% amid a general downturn in the crypto market. This points to investors seeking safety in the most established digital asset while altcoins suffer deeper losses.
When bitcoin’s share of the total market cap increases during a downturn, it often means that traders are exiting riskier assets like Ether, SOL, and XRP, consolidating their holdings into bitcoin as a defensive move. This trend suggests that confidence in smaller cryptocurrencies is weakening, which could lead to further declines in the altcoin market if the sell-off continues. Conversely, if bitcoin stabilizes and regains momentum, it could eventually reignite interest in altcoins, making this a key indicator to watch in the coming weeks.
Meanwhile, some see the current market dip as an opportunity. Robert Kiyosaki, author of “Rich Dad, Poor Dad,” shared his thoughts on X, suggesting that downturns like these are the best times to accumulate wealth. While long-term investors may agree, short-term traders remain cautious, watching key support levels closely. 
With bitcoin and Ether pivotal points, the coming days will determine whether this correction is just a temporary setback that provides an opportunity to get bullish or the beginning of a deeper market downturn to go bearish. Crypto has weathered storms before, but with economic uncertainty growing, the market’s next move remains uncertain.
Read more: Crypto market sees sharp decline: What’s behind the crash?
Update: Bitcoin has regained its losses in hours, currently hovering around $101,000. Most likely, the market has started reacting to Trump’s subsequent decision to hold on regarding tariff enforcements given the pushbacks. Ether is just over 6% short of its original price before the crash.
Image credit: AP Photo/Carolyn Kaster
Victor Solomon is a crypto analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
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