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Crypto Reporter
Shalini Nagarajan
Crypto Reporter
Shalini Nagarajan
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The crypto market took a hit on Tuesday, shedding 6% in value as investor uncertainty deepened in response to President Donald Trump’s latest trade policies.
Heightened tensions over tariffs targeting major US trading partners—Canada, Mexico, and China—have rattled markets, prompting a wave of sell-offs across risk assets.
The S&P 500 has erased all gains made since Trump’s re-election on Nov. 5, falling nearly 3% in that period. Meanwhile, the crypto sector followed suit, with Bitcoin dropping 3.4% to $79,415 and Ether plunging 9.4% to $1,963. XRP declined 6.5% and Dogecoin slid 10%.
Strategic Bitcoin Reserve Fails to Calm Markets as Sell-Offs Continue
Trump’s aggressive stance on trade has fueled fears of an economic slowdown, leading to a broader market downturn that has erased $4 trillion from the S&P 500’s peak last month.
Investors remain cautious as uncertainties loom over US monetary policy. In particular, market participants have shown disappointment over the Strategic Bitcoin Reserve announced by the administration, which relies solely on seized Bitcoin rather than fresh purchases. This has triggered a “sell the news” reaction, further pressuring crypto prices.
“The crypto market continues to exhibit risk-on behavior, with investor sentiment remaining cautious despite key developments,” said Agne Linge, head of growth at decentralized on-chain bank WeFi. “Since volatility set in on March 3, there has been no slowdown in selloffs despite the announcement of a Bitcoin reserve.”
Ongoing trade disputes between the US and key economic partners have exacerbated inflation concerns, adding to the potential for macroeconomic instability in the coming weeks, Linge added.
Crypto Market Downturn Triggers Widespread Crypto Liquidations
In the past 24 hours, the crypto market has witnessed liquidations totaling over $939m, affecting 331,426 traders, according to CoinGlass data. Bitcoin (BTC) led the liquidation spree, accounting for $315.44m, followed by Ethereum at $245.90m. Other notable losses included XRP ($36.91m), DOGE ($29.14m), and Solana (SOL) ($47.81m). Collectively, smaller altcoins contributed $96.85m to the liquidation tally.
Ruslan Lienkha, chief of markets at YouHodler, highlighted the broader economic headwinds shaping market sentiment.
“Pessimism has prevailed in the US stock market, and concerns about a potential recession in the US are growing,” he said. “Given these factors, the current consolidation phase could evolve into a medium-term bearish market.”
Lienkha also pointed out that crypto remains closely tied to broader financial markets.
“The crypto market is unlikely to thrive if the equity market undergoes a significant correction or downturn,” he said. ”While Bitcoin has the potential to evolve into a hedging asset in the future, it is currently perceived by investors as a high-risk asset, often reacting to broader market sentiment even more strongly than traditional financial markets.”
Furthermore, signals from the US bond market indicate a risk-off environment, adding to the selling pressure in equities and crypto alike. During such periods, traders tend to shift toward options trading to hedge against potential losses in the spot market.
As volatility grips both traditional and digital asset markets, investors remain on edge, waiting to see how the economic landscape evolves in the face of Trump’s ongoing trade maneuvers.
