The crypto market has faced a series of massive liquidations following Bitcoin’s slide from $93k to $83k within a few hours. The sharp fall in Bitcoin’s price came after Trump announced on Monday that executive orders to place tariffs on China, Canada, and Mexico would take effect in a few hours. The president further announced that further tariffs, including reciprocal tariffs, will become operative on April 2.
The stock market reacted to the news, with top indices like the S&P shedding 1.76% of its value as investors switched to a more risk-averse stance. Market sentiment remains mostly bearish, with concerns about rising inflation, trade retaliation, and disruptions in supply chains.
The crypto market also fell with other financial markets as Bitcoin lost $10k of its value from $93k before stabilizing at $85k. Each crypto trading platform featured varying prices for Bitcoin due to high levels of volatility as liquidations and high trading activities disrupted the algorithmic balance.
Current market events reflect Bitcoin’s sensitivity to macroeconomic factors, specifically the US’s trade affairs with other countries. While investors are anticipating a fully fledged bull run, the crypto market continues to battle uncertainty amidst tariff policies in the international space.
Optimism on Crypto Reserve Tanks as Trump Announces Immediate Tariff Implementation
On Monday, US President Donald Trump announced on Truth Social that his administration will work to establish a Crypto Strategic Reserve. According to Trump, the reserve will be composed mainly of Bitcoin and Ether, with other cryptocurrencies like Ripple, Solana, and Cardano, spurring investors to bet on further institutional demand.
The news was welcomed by crypto enthusiasts who had anticipated Trump’s pro-crypto actions and policies. Aside from the appointment of a few crypto-friendly officials when Trump’s presidency began, there has been little news on crypto policies in the US. Speculations on how the US Federal Reserve would fund the Crypto Strategic Reserve range from cryptocurrencies seized in law enforcement actions to taxpayers’ money.
Following Trump’s announcement of the crypto reserve, Bitcoin climbed to $93k, representing a 10% rise, Ethereum increased by 13%, while Cardano outperformed the most prominent cryptocurrencies with a 64% surge to $1.07. The rally was, however, short-lived as the market crashed after Trump announced that proposed tariffs on Mexico, Canada, and China would take effect in a few hours. Bitcoin lost 10%, Ethereum dumped below $2000, and other altcoins lost up to 25% due to the market crash. Spot Bitcoin ETFs noted over $3.2 billion in withdrawals as risk-averse investors pulled from the volatile crypto market.
Skepticism over upcoming tariff actions and retaliations has contributed to a marked bearish outlook in the crypto market. In response to the US doubling tariffs from 10 to 20% on goods from China, the Asian country retaliated with a 15% tax on US goods. Canada also imposed 25% retaliatory tariffs on goods from the US, while Mexico is considering both trade comebacks and other countermeasures to take on the US.
Current Market Outlook
As Bitcoin hovers in the range of $85 to $87k, investors are debating whether the $78K low marked a true bottom before another rally pushes Bitcoin past $100K. Crypto analyst Koroush AK shared that a lower high is confirmed on Bitcoin’s price chart, and crypto enthusiasts can see the coin at $73,000.
CNN Business’s Fear and Greed Index is 22 at the time of writing, signaling intense fear in the market. R. Linda, a top crypto analyst on TradingView, suggests that a drop to 75k could lead to an altcoin season. The analyst further states that correction is necessary to ensure a healthy market. Data from CryptoQuant shows that Bitcoin has a lower selling pressure as exchange reserves continue to fall, confirming a shift from selloffs to accumulations.
In the meantime, all eyes are set on the White House’s first-ever crypto summit, which Will Be held on March 7. The event will feature prominent founders and investors from the crypto industry, including MicroStrategy’s Michael Saylor and Coinbase’s CEO. The President’s Working Group on Digital Assets will also be in attendance.
Institutional demand for Bitcoin is also on the rise following current market corrections. El Salvador recently purchased 5 Bitcoins, bringing the government’s total holdings to 6100. Metaplanet, a Japanese Bitcoin Treasury company, also acquired 497 BTC for $43.9 million, bringing their total holdings to 2888.
US President Donald Trump continues to affirm on social media that he will ensure the US is the crypto capital of the world. Bitcoin is currently trading at $87,000 levels with a market capital of $1.7 trillion, with analysts projecting it to drop to $73K if the large-cap cryptocurrency does not consolidate above $90k.
What Traders Should Look Out For
Bitcoin’s recent price swings highlight how sensitive the crypto market is to global economic policies. While the initial excitement over the Crypto Strategic Reserve sparked a surge, the swift downturn following tariff announcements reminds investors of the broader macroeconomic forces. As Bitcoin hovers around $85K–$87K, market sentiment remains cautious, with analysts predicting potential further corrections before another rally. The next few weeks will be crucial in shaping Bitcoin’s trajectory, with key events like the upcoming White House crypto summit on the horizon. For now, investors remain watchful and balance optimism with caution.
