Crypto Prices Plunge Amid U.S.-China Trade War Escalation

Crypto prices experienced a significant decline following the escalation of the trade war between the U.S. and China. President Donald Trump announced a fresh round of tariffs on Chinese imports, raising duties and tariffs to a total of 145%, including previous measures. Notably, China was excluded from a 90-day global tariff pause, further intensifying the already tense trade standoff.

Markets reacted sharply to the news. In just the past hour, Bitcoin dropped 3%, Ethereum plunged 7%, Solana slipped 6%, and XRP fell 4%. Overall, the crypto market cap fell by 4%, erasing yesterday’s temporary recovery. Traders view the U.S.-China tariff escalation as a threat to global economic stability. The aggressive stance on China, while temporarily easing tensions with other nations, has increased investor uncertainty, pushing capital out of high-risk assets like cryptocurrencies. Risk-off sentiment is clearly back, and crypto is once again caught in the crossfire of macro geopolitics.

In a surprising turn, China and the European Union announced plans to begin negotiations aimed at removing EU tariffs on Chinese electric vehicles (EVs). The move signals a potential shift toward diplomacy, at least between China and key global partners outside the U.S. While it’s too early to say whether this could influence U.S.-China relations, any sign of a broader trade de-escalation might quickly revive risk appetite — and with it, crypto prices.

If the U.S. and China move toward re-opening trade negotiations, analysts believe crypto markets could see an immediate reversal. Risk assets have been reacting almost instantly to macro headlines, and a resolution — or even progress toward one — could drive Bitcoin back above $100K, Ethereum reclaiming $2K, and altcoins bouncing double digits. However, the longer uncertainty lingers, the more likely crypto stays under pressure.