Market Turmoil: Trump’s Tariffs Trigger Crypto Collapse as Bitcoin Dips Below $100K

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As of February 3, 2025, the cryptocurrency market is reeling from significant turbulence following President Donald Trump’s announcement of new tariffs that have sent shockwaves through financial markets.

Bitcoin, the leading digital currency, has plunged below the $100,000 mark, marking a stark decline in investor confidence and triggering a wave of liquidations across the crypto space.

The Tariff Announcement

On Saturday, Trump revealed plans to impose a 25% tariff on imports from Canada and Mexico, alongside a 10% tariff on goods from China. These measures are part of a broader strategy aimed at enhancing border security and combating the opioid crisis.

However, economists warn that such tariffs could exacerbate inflationary pressures, leading to increased consumer costs as businesses pass on these expenses to customers.

Immediate Market Reactions

The announcement has had immediate repercussions in the cryptocurrency market. Bitcoin’s price plummeted to approximately $92,000, reflecting a loss of over 8% in just a few days.

This decline has resulted in around $2 billion in leveraged liquidations within the crypto market, with significant losses reported among traders holding long positions. Ethereum also faced severe declines, dropping nearly 24% to around $2,300 during Asian trading hours.

Investor Sentiment and Predictions

Investor sentiment has turned increasingly bearish as fears of rising inflation and potential trade conflicts loom large.

The overall market capitalization of cryptocurrencies shrank by about 8%, with many altcoins experiencing double-digit losses.

Notably, XRP and Dogecoin fell by 30%, while Cardano saw a decline of 35%.In light of these developments, some financial experts have issued warnings about a potential crash in Bitcoin’s value.

They predict that while short-term volatility may prevail due to economic pressures from the tariffs, such downturns could present unique buying opportunities for savvy investors willing to capitalize on lower prices.

Future Outlook

As February unfolds, analysts are closely monitoring Bitcoin’s ability to maintain support levels. Currently trading around $93,800, Bitcoin has broken below its critical support at $100,000 and closed below its 50-day Exponential Moving Average (EMA) at $98,611.

If this trend continues, further declines toward $90,000 could be imminent.Despite the current chaos, some experts suggest that conditions may eventually favor Bitcoin’s resurgence as investors seek refuge from traditional assets amid escalating economic uncertainty.

There is optimism about Bitcoin’s long-term potential as significant capital may eventually shift from stocks and bonds into cryptocurrencies.

Conclusion

The recent imposition of tariffs by Trump has not only rattled traditional financial markets but also sent ripples through the cryptocurrency landscape.

As traders react to inflation fears and economic instability, Bitcoin’s dip below $100K serves as a stark reminder of the inherent volatility in digital assets.

Investors are urged to remain vigilant and consider strategic decisions as they navigate this tumultuous period in the crypto market.

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