- President Trump’s upcoming tariffs, set to take effect April 2, have reignited trade war fears, triggering a broad risk-off sentiment that’s pressuring both equities and cryptocurrencies.
- While crypto markets broadly declined, Bitcoin is showing resilience with steady ETF inflows and stronger macro hedge appeal—helping it maintain dominance at 61.5%.
The cryptocurrency market is under renewed pressure, with major tokens sliding in tandem with global equities as macroeconomic anxiety resurfaces. According to CoinMarketCap data, Bitcoin (BTC) fell by 1.22% over the past 24 hours, hovering near $81,500 in early morning trading Monday, extending a multi-day retreat sparked by geopolitical and policy-driven stressors.
Ethereum (ETH) was down nearly 2% to trade around $1,802, while XRP posted a sharper 5.1% drop, slipping to $2.06. Cardano (ADA) was hit harder, down 7% at $0.6412, while Binance Coin (BNB) declined 1.93%, returning to the $600 threshold.
Amid the broader selloff, only a few tokens—including Solana (SOL), up 0.5%, and niche altcoins like FORM (+4.64%) and TON (+1.05%)—managed to eke out gains.
This price action reflects a market teetering on the edge of a broader risk-off pivot, as crypto assets remain closely tethered to traditional financial sentiment.
The total crypto market cap now hovers near $2.65 trillion, with Bitcoin’s dominance at 61.5%, signaling a defensive posture among traders gravitating toward perceived safer crypto allocations.
Tariffs Stoke Old Trade War Fears
At the heart of the recent market downturn is the return of an all-too-familiar headwind: U.S. trade policy. President Donald Trump’s declaration last week reaffirming sweeping tariffs—set to begin April 2—has rattled markets already on edge. The administration’s plan to impose 25% levies on Mexican and Canadian imports is reviving trade war anxieties that first gripped global investors in 2018.
Risk assets, including crypto, are absorbing the shock. On March 28, Bitcoin dropped over 2.5% amid parallel declines in the S&P 500 and Nasdaq following the tariff announcement. Dubbed “Liberation Day” by White House officials, the policy shift is stoking fears of recession and currency volatility, prompting a flight to stablecoins and commodity-backed tokens like Paxos Gold (PAXG).
“The timing proves particularly delicate,” said Ryan Lee, Chief Analyst at Bitget Research. “Digital assets remain tightly correlated to equities—Bitcoin’s 0.67 correlation with the Nasdaq suggests that continued equity weakness could easily drag crypto prices lower.”
Liquidations Accelerate the Slide
The negative feedback loop didn’t stop with macroeconomic news. According to CoinDesk report, more than $300 million in long positions were liquidated across exchanges on March 29 alone. This wave of forced selling, triggered by steep intraday price declines, accelerated the bearish momentum and revealed a fragile market structure built on high leverage and thin liquidity.
Between March 28-29, Bitcoin lost another 3%, while altcoins like XRP and Solana plunged 4–5%. The CoinDesk 20 Index fell 3.3%, signaling broad-based weakness. This “derisking” move has left traders scrambling for hedges, even as volatility metrics remain elevated.
Lee warned that Ethereum is particularly exposed: “A 20% drop from current levels could liquidate more than $336 million in DeFi lending positions. Ethereum’s heavier reliance on leverage and smart contract protocols makes it far more vulnerable to cascading selloffs compared to Bitcoin.”
Bitcoin Reserve Policy Fizzles
Adding to the sense of disillusionment is the failure of recent U.S. crypto policy to spark confidence. Earlier this month, Trump signed an executive order establishing a Strategic Bitcoin Reserve—a move initially seen as a bullish catalyst. But the reserve relies solely on confiscated Bitcoin, rather than fresh purchases, dashing investor hopes for new institutional demand.
“Without meaningful inflows, the announcement has had little lasting impact,” said Lee. “It’s a textbook example of policy optics falling short of actual market mechanics.”
Indeed, Bitcoin ETF flows continue to reflect cautious optimism—BlackRock and Fidelity have reported modest net inflows—but Ethereum products are bleeding capital. This divergence underscores a growing institutional preference for Bitcoin as a macro hedge, even as Ethereum struggles to defend its utility-driven valuation.
Structural Risks Loom Large
The implications for Ethereum are particularly stark. Technical support near $1,600 is emerging as a critical threshold, with market makers watching closely for signs of a breakdown. A breach could trigger significant liquidation events on platforms like Aave and Compound, further eroding investor confidence.
Meanwhile, Bitcoin continues to range between $80,000 and $86,000—a zone that now appears more like a battleground than a launchpad.
“Traders face a delicate balancing act,” Lee said. “They must weigh Bitcoin’s comparative resilience against Ethereum’s structural vulnerabilities, all while digesting an increasingly unstable macro backdrop.”
Decoupling or Déjà Vu?
For a market that once prided itself on being an uncorrelated asset class, crypto is behaving more like a high-beta tech stock basket. The elevated correlation with equities, the sensitivity to fiscal policy, and the reaction to global trade rhetoric all suggest that digital assets are still beholden to traditional risk cycles.
Whether this is a temporary setback or a deeper structural reckoning will likely depend on how the next week unfolds. Key watchpoints include:
- The impact of Trump’s tariffs on equity markets and consumer sentiment
- ETF flows into Bitcoin versus Ethereum
- ETH’s ability to hold key support levels amid liquidation risk
Until then, caution is the operative word. The dip may tempt bargain hunters, but the crosscurrents are fierce—and the floor might not be as close as it seems.
Read Also: BitPay Expands Crypto Payment Services to UK
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