Cryptocurrency markets experienced a brief downturn following the announcement from U.S. President Donald Trump of new tariffs on steel and aluminum. Trump declared a 25% tariff on these imports and warned of reciprocal tariffs against countries imposing import fees on American goods. In reaction to this news, the crypto markets saw a temporary decline. However, they have since shown signs of recovery.
Bitcoin momentarily dipped to $94,000 but has climbed back over $97,000, as reported by CoinMarketCap. Similarly, Ether dropped to a low of $2,537 but bounced back to $2,645. The total cryptocurrency market capitalization decreased from $3.15 trillion to $3.10 trillion and has since recovered somewhat to $3.13 trillion.
The Crypto Fear & Greed Index, which gauges market sentiment for Bitcoin and other cryptocurrencies, has remained in the ‘fear’ territory, with a recent dip from a score of 46 to 43.
Trump has further plans to impose tariffs on the EU, affecting products like superconductors, oil, gas, steel, and copper. Earlier, on Feb. 1, tariffs were levied against Canada, Mexico, and China, leading to market instability across both stock and crypto sectors. However, a 30-day pause on tariffs aimed at Mexico and Canada spurred a market rebound, though the possibility of reinstating these tariffs remains.
Ben Zhou, co-founder and CEO of Bybit, estimated that liquidations could have ranged from $8 billion to $10 billion due to these developments.
