Market sentiment turned bearish, affecting most cryptocurrencies. Bitcoin briefly dropped almost 6% to $93,890, whereas smaller tokens noticed even sharper declines. Ethereum, the second-largest cryptocurrency by market capitalization, plunged 27% on Monday, February 3, to $2,135. It later rebounded barely, however consultants see this as its largest intraday drop since Might 2021.
On the morning of February 3, Ethereum traded close to $2,500, whereas Bitcoin hovered round $93,960. In the meantime, XRP, related to Ripple, fell over 15% to $2.20.
Analysts level out that Trump’s multi-billion-dollar tariffs on imports from Canada and Mexico will take impact quickly, doubtlessly disrupting world commerce. He has additionally threatened to impose tariffs on the European Union. “Trump’s tariff warfare is impacting the entire market,” Caroline Bowler, CEO of BTC Markets, stated. Considerations over commerce conflicts and stagflation, which might set off a recession, are spreading throughout altcoins and Bitcoin, she added.
Given these developments, consultants imagine Bitcoin’s bull market could possibly be nearing its finish. Though weaker than earlier cycles, the present one exhibits similarities to the 2015–2018 interval, leaving room for additional progress. In response to Glassnode analysts, this Bitcoin rally is marked by a slowdown in worth momentum. If Bitcoin reaches a brand new all-time excessive and attracts recent traders, its bull section might conclude quickly.
These market fluctuations mark a pointy reversal after the latest rally fueled by Trump’s pro-crypto stance throughout his election marketing campaign and after his victory. On January 24, the president signed an government order to ascertain a process drive that can draft key laws for US crypto companies inside six months. The group may even discover the creation of a nationwide crypto reserve.
Ethereum has dropped greater than Bitcoin, Solana, and Ripple. In response to Jonathan Yark, a number one dealer, it is because the latter belongings are anticipated to be included within the US digital asset reserve. Because of this, Ethereum’s liquidity has been much less resilient than Bitcoin’s, making it extra susceptible to volatility, he defined.
In the meantime, the US Securities and Change Fee (SEC) has fast-tracked the approval of a mixed spot ETF for Bitcoin and Ethereum by Bitwise. Earlier, the company gave the inexperienced mild to related funds from Hashdex and Franklin Templeton.
Regardless of optimism about Trump’s crypto plans, his tariff bulletins triggered a powerful sell-off over the weekend as merchants hedged towards broader macroeconomic dangers. Nevertheless, Bitcoin has weathered the downturn higher than smaller tokens, which suggests it could recuperate efficiently, Sean McNulty, head of derivatives at a monetary agency, stated.
