A very sluggish crypto weekend for traders. Most altcoins are bleeding heavily with losses ranging from 5 to over 30% in the last 24 hours.
The Bitcoin price briefly dropped below $100k, but found support around the $99k mark which has happened a few times in January as well. Based on the BTC chart, it looks like $99k is a strong support level, and as long as we stay above this threshold, we can view the whole downturn as just a correction.
Trade War Tensions Hit Markets
President Trump announced he plans to put 25% tariffs on goods from Canada and Mexico. Canada quickly responded and will impose its own 25% tariffs on $155 billion worth of US goods. Trump didn’t stop there – he also wants to put a 60% tariff on Chinese imports. China has already said it will take retaliatory measures against these new tariffs. The news isn’t sitting well with markets, as trade wars generally mean bad news for economic growth and stability.
Canada’s response to U.S. tariffs. Justin Trudeau's best speech.
— Anonymous (@YourAnonCentral) February 2, 2025
Canada will place 25% tariffs on $155 billion in US imports in retaliation for Trump tariffs. That is an addition to a nationwide boycott on all US products across Canada. #cdnpoli #tariffwar pic.twitter.com/VJavxmO6nH
The new tariff announcements have made investors nervous. When markets face uncertainty like this, people often move away from riskier investments. Cryptocurrencies are feeling this pressure too, just like other high-risk assets. The crypto market has been particularly sensitive to macro events lately, and this trade war situation is no exception.
These trade tensions could lead to more problems. The tariffs might push inflation higher, as imported goods become more expensive. If that happens, central banks might raise interest rates to control inflation. When interest rates go up, investors usually prefer safer investments over cryptocurrencies. Higher rates also mean better returns on traditional investments like bonds, which can pull money away from the crypto market. This could keep pressure on crypto prices for a while.
The market will likely keep watching how these trade tensions develop. Any signs of escalation could bring more selling pressure, while signs of resolution might help prices recover. For now, traders need to look at that $99k Bitcoin price level. If we drop below that, then there are even more reasons to panic and we could be seeing even more sell-offs.
Read also: Can XCN Reach $1 in 2025? Onyxcoin Price Prediction
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