Crypto traders can be reasonably happier today than yesterday after experiencing the worst crash in history with over $2.3 billion liquidated within 24 hours.
However, Bitcoin price quickly rebounded from $91k to over $100k while Ethereum managed to recover from $2.2k lows to now over $2.7k. Other altcoins also recovered, for instance DOGE pumped from $0.24 lows to over $0.28 before pulling back to the current $0.26-0.27 range.
So, what’s driving the current market recovery after such a bad start of February?
What you'll learn 👉
Trump’s Trade Policy Shift Calms Markets
The main catalyst appears to be President Trump’s recent moves in cooling economic tensions with Mexico and Canada. In a significant development on February 3, Trump announced a one-month postponement of the planned 25% tariffs on Canadian and Mexican imports. This decision came after productive talks with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum.
JUST IN: 🇨🇦🇺🇸 Canadian Prime Minister Trudeau says tariffs are paused after a discussion with President Trump.
— Watcher.Guru (@WatcherGuru) February 3, 2025
The cryptocurrency market’s rebound coincided with this easing of trade tensions, as investors’ concerns about a potential trade war subsided. Initially, the threat of tariffs had strengthened the U.S. dollar, putting pressure on crypto prices. The temporary pause has helped reduce immediate inflation concerns and improved overall market sentiment for risk assets like Bitcoin.
Positive Signals from Trump Administration
Adding to the positive momentum, Trump’s recently appointed Crypto Czar David Sacks is scheduled to host a press conference tomorrow at 2:30 PM ET, where he will present the administration’s strategy for U.S. leadership in digital assets.
In my opinion, it’s a great time to add $ETH.
— Eric Trump (@EricTrump) February 3, 2025
The market also took notice when Eric Trump shared his thoughts on social media, stating “In my opinion, it’s a great time to add $ETH.” While this coincided with Ethereum’s price recovery, investors should always conduct their own research before making investment decisions.
The broader financial markets have shown similar patterns of recovery, with both the S&P 500 and Nasdaq posting gains, highlighting crypto’s increasing correlation with traditional markets.
Read also: Expert Revises SUI Price Prediction as Technical Indicators Align
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