Crypto Market Plummets 5% as Bitcoin Drops 3.6% on Tariff Fears

The crypto market experienced a significant downturn over the weekend, with Dogecoin (DOGE), Cardano’s ADA, and XRP each declining by more than 7%. This drop occurred as investors began to take profits following a strong week of gains. The market sentiment shifted abruptly when Bitcoin fell from a daily high of $111,200 to just over $107,000 on Friday. This decline was triggered by President Donald Trump's renewed threats of a tariff war with the European Union, which included a proposed 50% levy as negotiations appeared to stall.

The overall market capitalization of cryptocurrencies shed 5%, and the broad-based CoinDesk 20 (CD20), an index tracking the largest tokens, fell by 2.2%. This movement came despite Bitcoin reaching fresh highs above $111,500 just days earlier, supported by ETF inflows, stablecoin legislation, and institutional buying. However, these factors did not provide the same level of support for altcoins in the short term.

According to Haiyang Ru, co-CEO of HashKey Group, Bitcoin reaching a new all-time high typically carries altcoins in a bullish direction. However, if Bitcoin's volatility increases, traders may shift into regulated stablecoins, especially with new frameworks in the U.S. and China Hong Kong easing that transition. Alex Kuptsikevich, chief analyst at FxPro, noted that crypto sentiment recently hit levels last seen in January, just as BTC and ETH reached critical resistance zones. Unlike previous rallies, the current movement is backed by real demand and macro factors.

Despite these supportive factors, the market is showing signs of fatigue. Ethereum is struggling to break past its 200-day moving average near $2,650, while altcoins that previously surged, such as HYPE and EIGEN, are now cooling off after double-digit gains. Analysts warn that if Bitcoin does not establish a new support zone, altcoin losses could deepen. The weekend pullback highlights the fragility of rallies in low-liquidity conditions and the speed at which sentiment can turn.