Crypto Market Plummets 6% Amid Trump's Trade Policies, Bitcoin Drops 3.4%

The cryptocurrency market experienced a significant downturn this week, with its total value declining by 6%. This drop was primarily driven by investor concerns over President Donald Trump’s recent trade policies and growing apprehensions about economic instability. Bitcoin, the leading cryptocurrency, fell to $79,415, marking a 3.4% decrease, while Ethereum saw a more substantial drop of 9.4%, reaching $1,963.

The sell-off in the crypto market coincided with escalating tensions over tariffs imposed on major U.S. trading partners. Trump’s aggressive trade policies, targeting countries such as Canada, Mexico, and China, have rattled markets and triggered widespread selling of risk assets. These policies have raised fears of a potential trade war, which economists worry could exacerbate inflation and increase the cost of imported goods, further straining an already uncertain economy.

In a recent interview, Trump acknowledged the possibility of a recession during the “transition” period for his tariff strategy. He described the country as entering a phase of potential economic pain, which has added to the market’s jitters. The broader stock market has also felt the impact of these policies, with the S&P 500 erasing all gains made since Trump’s re-election in November, falling nearly 3% during that period.

Investors had high expectations for the Strategic Bitcoin Reserve announced by the administration. Many had hoped that the government would make substantial purchases of Bitcoin and other cryptocurrencies to establish this reserve. However, the plan revealed that the reserve would rely solely on cryptocurrencies seized from illegal activities, with no additional crypto purchases planned. This disappointment failed to create the anticipated buying pressure in the market.

The market downturn has led to massive liquidations across the crypto sector. In the past 24 hours, over $939 million in positions were liquidated, affecting a significant number of traders. Bitcoin led these liquidations with $315.44 million, followed by Ethereum at $245.90 million. Other cryptocurrencies also saw substantial losses, with XRP down 6.5%, Dogecoin sliding 10%, Solana dropping 7%, and Cardano falling 8%.

The crypto fear and greed index, which measures trader sentiment, has plummeted to a reading of 17, indicating “extreme fear”