XRP Rallies 6% as US-Mexico Tariff Tensions Ease

XRP Recovers 6% After the US and Mexico Reach Agreement to Pause Tariffs

The cryptocurrency market experienced a significant downturn last week, with XRP being one of the hardest-hit assets. The digital currency plummeted over 33%, falling from a high of $2.92 to a low of $1.95, marking its weakest level since December 20, 2024. Just two days prior, XRP was trading as high as $3.13, making the recent downturn particularly steep.

However, this decline is not unique to XRP. Bitcoin has also dropped below $91,000, a sharp fall from its $100,000 peak earlier in the week. Meanwhile, popular altcoins like Dogecoin and Shiba Inu have suffered even greater losses, with declines nearing 40%.

On February 1, 2025, President Trump implemented a series of aggressive trade tariffs, targeting Mexico, Canada, and China. The new policy enforces a 25% tariff on goods from Mexico and Canada and a 10% tariff on imports from China. The administration has positioned these tariffs as measures to combat illegal immigration and drug trafficking, but they have triggered significant geopolitical and economic repercussions.

In response, Mexico, Canada, and China have announced their retaliatory tariffs and initiated legal proceedings against the U.S. These escalating trade tensions have rattled financial markets, sparking fears of a prolonged global trade war.

Crypto investors, known for their sensitivity to macroeconomic conditions, reacted swiftly to the news. Bitcoin crashed to a three-week low, narrowly holding above the $90K mark, while XRP sank to a seven-week low, dipping below $2 after nearly setting a new all-time high earlier in the week.

Market analysts suggest heightened economic uncertainty has driven investors away from riskier assets like cryptocurrencies, prompting the steep sell-off seen across the market.

Despite the turbulence, many traders and analysts see this dip as a prime buying opportunity before the next potential uptrend. Within hours of reaching its low of $1.95, XRP has already managed to reclaim the $2 level, signaling early signs of a rebound.