Trump's Tariffs Spark Crypto Market Rout

Ethereum's price has dropped below $2,200, marking a significant decline in the cryptocurrency market. The recent sell-off has been attributed to a risk-off sentiment following President Donald Trump's announcement of new tariffs on imports from China, Mexico, and Canada. This development has added complexity to the ongoing trade wars and spooked investors, leading to a market-wide sell-off.

Bitcoin, the world's largest cryptocurrency, has also experienced a notable decline, falling by over 5% to reach a low of approximately $91,200 before rebounding to around $94,000. Despite this recovery, Bitcoin remains roughly 13% below its all-time high of $109,000, and trading volume has surged by more than 200%, suggesting considerable selling pressure or market panic.

The overall global crypto market cap has dropped nearly 12% during the same period, settling at about $3.15 trillion. Following President Donald Trump's inauguration on Jan. 20, Bitcoin and other altcoins saw a significant price increase. However, recent developments, including new tariff policies, have contributed to a drastic decline in market sentiment and asset values.

Ethereum (ETH) has been particularly affected by the market downturn, falling by nearly 20% in the last 24 hours. Other altcoins, such as Ripple (XRP), Solana (SOL), and Binance Coin (BNB), have also experienced significant price declines, with XRP falling by 22%, SOL by 8%, and BNB by over 15%.

Rising trading volume alongside price dips often signals strong selling pressure or market panic, as more traders offload their assets. This pattern suggests that long-term investors are now selling their coins at lower profits than their purchase price—or even at a loss year-to-date—as illustrated by the Bitcoin: Long Term Holder SOPR chart. Such behavior often indicates capitulation among long-term holders, a phenomenon common during bearish market trends and corrections.

Experts, including BitMEX CEO Arthur Hayes, have warned that a "financial crisis" may be on the horizon. In response to the market downturn, a notable whale took a strategic position by shorting ETH using a staggering 50x leverage. As