Crypto Market Slides 4.65% Amid Trump Tariffs, Bitcoin Drops 2.5%

The crypto market is experiencing a downturn as investors brace for the impact of President Donald Trump’s reciprocal tariffs, set to take effect on April 2. This uncertainty, coupled with key macroeconomic data due later in the day, has led to a significant slide in altcoins. Bitcoin (BTC) has lost 2.5% in the past 24 hours, while ether (ETH) has seen a nearly 6% decline. XRP and dogecoin (DOGE) have also experienced substantial drops, with 5.5% and 7% decreases respectively. The broader CoinDesk 20 Index (CD20) has dropped by 4.65%. In contrast, gold has hit new highs, benefiting tokens backed by the precious metal, which have climbed to a $1.4 billion market capitalization in March.

Traders are moving to reduce risk exposure ahead of the U.S. personal consumption expenditure (PCE) report, which could influence Federal Reserve interest rate decisions and thus any appetite for risk going forward. Bitcoin traders are also anticipating a record-breaking $12.2 billion in BTC options expiring on Deribit today, with a max pain point at $85,000. However, implied volatility remains near annual lows, suggesting that the expiry is unlikely to move the market significantly. According to Wintermute OTC trader Jake O., these expirations have yet to consistently move markets due to the relatively small open interest in BTC options compared to spot activity.

While the derisking trend grows, spot bitcoin exchange-traded funds (ETFs) have seen consistent inflows since mid-March, adding nearly $1 billion over the past two weeks. In contrast, spot ether ETF outflows have remained persistent, with around $115 million exiting these funds over the same period. Looking ahead, money managers are likely to continue reducing risk exposure. This trend has spurred Goldman Sachs to raise its gold price target for the year to $3,300 per troy ounce, with the potential to rise to $4,500 in an “extreme tail scenario.”

In the broader market, a small set of tokens are gaining higher traction on social media platforms, making it beneficial for traders to put on a watchlist as market conditions improve. Solana (SOL) leads the pack due to its high liquidity and growing interest in Solana-based projects. Curve DAO token (CRV) has seen a 30% price rebound and increased trading activity in the past three weeks. COTI is generating excitement following a recent airdrop, while newly-issued Walrus (WAL), a Sui ecosystem project, is riding a wave of interest fueled by trading pair mentions and exchange listings. Social chatter often precedes price movements because it is indicative of forthcoming demand or shifting sentiments.

Global open interest across all instruments has declined to $105 billion from $124 billion earlier in the day, coinciding with the broader drawdown in major digital assets. Over the past 24 hours, total liquidations amounted to $362 million, with long positions accounting for a dominant 83% of the wipeout. Among assets with more than $100 million in open interest, the steepest percentage declines were seen in Pepe, PNUT, Worldcoin, Avalanche, and BNB. Only three assets in this group saw an uptick in open interest over the last 24 hours: Toncoin, Berachain, and ACT. On the liquidation heatmap for the largest futures pair, recent price action has swept through major downside liquidation clusters. The next significant zones for potential liquidations are located at $86,000 and $88,000, suggesting these levels could attract volatility if approached.

Ether continues to lag behind the broader market, with prices consolidating around levels last seen in November 2023. With prices below all the key exponential moving averages (EMAs), ETH has struggled to reclaim the former support near $2,110 — a level aligned with the wick lows from the Aug. 5 and Feb. 3 sell-offs. This level is set to act as resistance unless the price can find acceptance above in the coming days. Bitcoin dominance continues to increase and is now approaching a key resistance level at 62.3%. Currently at 62.05% and holding above all major exponential moving averages (EMAs), the strength in BTC dominance suggests continued pressure on altcoins in the near term, with further downside risk likely if this trend persists.