Emmanuel Ochayi
The cryptocurrency market took a sharp downturn, with Bitcoin dropping below $91,000 for the first time since November. The decline followed U.S. President Donald Trump’s announcement that he would move forward with tariffs on Canada and Mexico in March.
The broader crypto market reacted negatively to the news, with Ethereum and other altcoins, also experiencing steep losses. Analysts believe that growing economic uncertainty and fears of inflation contributed to the sell-off.
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Bitcoin lost over 4% in 24 hours, plunging below $91,000. Data from CoinGecko showed that the leading cryptocurrency hit its lowest price in months, reflecting a weak appetite for digital assets. Coinglass reported that 284,555 traders were liquidated, with total losses reaching $884 million.
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The S&P 500 and Nasdaq Composite also saw significant declines, dropping 2.3% and 4% respectively. Market experts say Bitcoin and traditional financial markets are becoming increasingly correlated, with uncertainty in the global economy affecting both.
“The macro-driven uncertainty is weighing on both crypto and traditional markets,” a senior analyst at a crypto trading firm stated.
Ethereum and Altcoins Join the Decline
Ethereum also suffered a major drop, losing nearly 11% in a single day. The second-largest cryptocurrency fell to $2,400, following last Friday’s massive hack of Bybit, where over $1.4 billion worth of Ethereum and other tokens were stolen.
The entire crypto market capitalization declined by 8%, wiping out over $220 billion in value. The market now stands at approximately $2.9 trillion, erasing gains made since Trump’s election victory. If the total market value drops below $3 trillion, experts warn that it could mark the end of the ongoing crypto bull market.
The Bitcoin Fear and Greed Index plummeted to 25, signalling “extreme fear.” Analysts suggest that without strong buying momentum, the market could enter a prolonged period of stagnation.
Trump’s Trade Policies Spark Economic Concerns
During a press conference with French President Emmanuel Macron, Trump confirmed that his administration would proceed with 25% tariffs on Canada and Mexico. The timing of this statement coincided with the cryptocurrency market’s sharp decline.
Economic experts warn that Trump’s tariff policies could add to inflationary pressures, reversing efforts made in the past two years to control rising prices. A University of Michigan Consumer Survey found that U.S. consumer sentiment dropped by 10% in January, hitting a 15-month low due to concerns over inflation and economic instability.
Market analysts believe Trump’s economic policies are fueling uncertainty, leading investors to pull back from riskier assets like cryptocurrencies.
Solana Faces Strong Selling Pressure
Among major altcoins, Solana suffered the steepest losses, dropping nearly 50% from its January peak. A key reason for Solana’s decline is the upcoming release of 11.2 million SOL tokens by the FTX estate, valued at over $17 billion.
Investors worry that the release of such a large amount of tokens could trigger further selling pressure, causing more volatility in the market. Analysts fear that this could lead to market contagion, impacting other cryptocurrencies tied to the meme coin market.
Future Outlook for Crypto Investors
The cryptocurrency market remains under pressure as investors respond to Trump trade policies and broader economic uncertainty. The lack of strong momentum suggests that a period of consolidation may continue in the coming weeks.
Traders are closely watching for signs of recovery, but without significant institutional buying or positive regulatory developments, the market could struggle to regain its previous highs.
For now, crypto investors remain cautious as they assess the impact of Trump economic policies on the financial landscape.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
