NEO (neo) 
Cryptocurrency Market Sees Significant Decline Amid Rising Trade Tensions
The total market capitalization of all cryptocurrencies has plummeted by nearly 4% to under $3.6 trillion, with Bitcoin and most altcoins experiencing significant losses. This downturn is largely attributed to the ongoing risk-off sentiment in the financial market, sparked by the implementation of tariffs on Chinese imports and Mexican and Canadian goods.
Rising Trade Tensions and Market Volatility
The introduction of a 10% tariff on Chinese imports and a 25% levy on Mexican and Canadian goods has led to a substantial increase in market volatility. The Dow Jones, S&P 500, and Nasdaq 100 indices all dropped by almost 1% as a result. Furthermore, U.S. inflation has increased by the most in eight months, suggesting that the Federal Reserve will likely not cut interest rates in the near future.
This economic uncertainty has had a ripple effect on the cryptocurrency market, with tokens like Virtuals Protocol, Bittensor, Neo, and Jasmycoin experiencing losses of over 15% on Sunday. The main reason for this decline is the risk-off sentiment in the financial market, which tends to negatively impact cryptocurrency prices.
Impact on Inflation and the Federal Reserve
The tariffs are expected to have a significant impact on inflation, with companies likely to increase prices to cope with the change. This is evident in the case of General Motors and Ford vehicles imported from Mexico, which are expected to see a 25% price increase. Similarly, other items like televisions and smartphones will also be affected.
As a result, cryptocurrency prices are expected to continue their downward trend. Historically, cryptocurrency prices tend to drop when there is substantial volatility and economic risk in the United States, particularly when the Federal Reserve is highly hawkish.
Bitcoin Price Chart Analysis
A technical analysis of the Bitcoin price chart reveals a double-top pattern formation at $108,445, with its neckline at $88,940. This is a high-risk chart pattern that points to further downside. Additionally, a bearish divergence chart pattern has formed, with the Percentage Price Oscillator and the Relative Strength Index continuing to fall.
If Bitcoin loses the 50-day moving average support, there is a risk that it will drop to $88,940. As a result, altcoins are also falling as the risks of a Bitcoin crash rise.
Cryptocurrency prices tend to drop when there is substantial volatility and economic risk in the United States, particularly when the Federal Reserve is highly hawkish.
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