The crypto market has taken a sharp downturn, entering the fear zone of the crypto fear and greed index. Sentiment levels have dropped to their lowest since October 2024, resulting in a $2 billion loss in the last 24 hours.

Market Volatility

The sudden drop in market value can be attributed to a combination of factors, including fresh U.S. tariffs, weak liquidity, and panic selling. As a result, Bitcoin prices have declined by nearly 6% to around $91,200, before experiencing a slight bounce back. However, altcoins have been hit harder, with significant losses across the board.

Notable losses include Ethereum, which tanked by 18%, XRP, which dropped by 20%, and Solana, which fell by 8%. The total market cap has also taken a hit, sinking nearly 12% to $3.15 trillion.

Expert Insights

According to Matrixport co-founder Daniel Yan, the sell-off is a typical result of weak Mondays driven by low liquidity and CTAs chasing. He believes that the market will recover soon, as the tariffs are unlikely to have a significant impact on productivity or inflation.

Sell-off: another typical weak Monday driven by low liquidity and CTAs chasing – Asia market these days can’t take any negative news nor apply independent thinking. The tariffs won’t lead to much productivity shock or inflation shock for the U.S. – market will recover soon.

Yan also highlighted the extreme volatility in the market, with Coinbase’s ETH premium spiking to 6% while the top 100 tokens averaged a 22% loss.

XRP Price Structure

An X user under the alias @Coins_Kid noted that XRP’s price structure suggests an “expanded flat wave 4 correction” since December. While some see this as a potential buy-the-dip moment, overall sentiment appears to be cautious.

Long-term Impact

Despite the short-term volatility, some experts believe that the tariffs could have a significant long-term impact on the crypto market. Bitwise’s head of alpha strategies Jeff Park argues that the U.S. is looking for a way to weaken the dollar without crashing its ability to borrow cheaply, which could lead to a “Plaza Accord 2.0” and a massive increase in Bitcoin’s value.

This is the only thing you need to read about tariffs to understand Bitcoin for 2025. This is undoubtedly my highest conviction macro trade for the year: Plaza Accord 2.0 is coming.

With a weaker dollar, lower U.S. rates, and global economic uncertainty, Bitcoin could be heading “higher, violently faster,” according to Park.

For more news and updates on the crypto market, visit Global Crypto News.

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