- New American rates about China, Mexico and Canada cause geopolitical tensions, causing retaliation trading restrictions.
- VIX rises 54%and signals increased market anxiety and risk-off sentiment among investors.
The Cryptocurrency market has taken a sudden dive today, with Bitcoin [BTC] Poored to around $ 83,591 and losing the most profit it achieved after Donald Trump announced plans for an American strategic crypto reserve.
This decline unfolded when the financial markets reacted to increased geopolitical tensions, newly imposed US trade rates and the retaliation measures of China against American companies.
Rate problems: Was a crash inevitable?
Trump’s suggestion of an American crypto reserve had initially sent Bitcoin rises above $ 95,000, fed by optimism that official support would strengthen the sector.
Announcements were also made plan To build five semiconductor facilities in Arizona, increase the total American investment from TSMC to $ 165 billion and generate “hundreds of billions of dollars” in economic activity.
Investors saw this as a signal of strong government support for the technology and crypto sectors that pushed Bitcoin prices.
That optimism once faded the White House announced Fresh rates for China, Mexico and Canada, increased regulatory uncertainty and worsen the global economic prospects.
When Trump confirmed a rate of 25% in the Canadian and Mexican goods, Canadian Prime Minister Justin Trudeau promised a powerful reaction, and Canada quickly took revenge on a levying of 25% about $ 100 billion in American imports.
Trudeau issued a strong explanation, in the affirmative,
“Canada does not let this unjustified decision remain unanswered.”
On March 4, China added 15 American companies to its export control list, which limits the flow of critical technologies to those companies and a new round of trade friction is demonstrated.
How bad did it come?
Investor fear about this policy cut by stock markets. On March 3, the S&P 500 lost 1.8%, while the Nasdaq lowered 9% compared to the peak of December.
The Dow Jones tumbled briefly with 1,100 points after achieving 300 points earlier that day.
Technology and Consumer Cyclic Shares confronted The heaviest losses, in which Nvidia slips 9.46%, Broadcom loses almost 6%and Microsoft drops 2.41%. Amazon and Tesla also fell more than 3%.
Source: Finviz
During this unrest, the Volatility Index (VIX)-often called the “anxiety meter”-Since mid-February 54%, as a result of deep concern about the impact of trade policy and legal shifts.
It is not surprising that the slide of shares transferred to cryptocurrencies, because traders decreased the exposure to more risky companies.
Source: TradingView
Trump’s 2nd of the announcement of March that the planned US Crypto Strategic Reserve would include Bitcoin, Ethereum [ETH]And various Altcoins initially generated an increase in digital assets.
Bitcoin raced as high as $ 95,000 before the rally steam lost and dropped to $ 86,334.49 on Monday, a decrease of 8.31% compared to the weekend peak.
Source: TradingView
Ethereum, which also received momentum, reversed the course and placed a decrease of 14.88%.
Growing fears for economic delay added further. Atlanta Federal Reserve GDPNOW prediction For the first quarter of 2025, considerably decreased from +3.9% to -2.8% in just one month.
This drastic decrease indicates a deteriorating economic outlook.
Source: X
As a result of the negative economic prediction, investors are looking for safer investments, such as 10-year-old treasury bonds. This increased demand has brought the 10-year-old Treasury yield to 4.178%.
The combination of fears of economic delay and the significant decrease in GDP prediction has created uncertainty in the market and led investors to look for safer assets.
Once rise, now sinking
By March 4, during the time, Bitcoin had slipped to $ 83,925.46, which ended the recent Upswing. Exchange Netflows, a metric tracking Bitcoin transfers in and from trading platforms, emphasized a shift in trading behavior.
Source: Cryptuquant
From March 2 to March 3, the outflows of more than 2,000 BTC on each day suggested accumulation by holders in the long term.
However, Netflows became positive on March 4, indicating that some investors sent Bitcoin back to exchanges, possibly to increase profit or to monitor at further price decreases.
Source: Cryptuquant
Cryptoquant’s Height Output Profit Ratio (Sopr) supported this trend, which fell from 1,0106 on March 2 to 0.994 on March 4.
This shift means that traders who had won the short rally now left positions under their first access points.
What do traders feel?
Market sentiment deteriorated quickly and the Fear & Greed Index dropped to 15. This reflects “extreme fear” that is comparable to earlier market cases. In these crashes, lifting tree positions and panic that sell deep losses.
Coinglass -Data shown That 297,653 traders were liquidated over the past 24 hours, resulting in $ 1.01 billion in liquidations. The most important of these was a liquidation of $ 13.4 million on Bitfinex.
Source: Coinglass
The unrest also attracted the attention of political observers.
Ki Young Ju, CEO of cryptoquant, described How the US government seems to treat cryptocurrency as a geopolitics instrument,
“The cryptomarkt is increasingly becoming a weapon of the United States. Universal moral standards have decreased since Trump’s election. If something trump uses and serves American national interests, it is no longer considered illegal. “
Where are we going from here?
In general, the recession of the crypto market can be reduced to various intertwined factors: geopolitical uncertainty, massive liquidations and rapidly changing investor sentiment.
The introduction of new rates on China, Mexico and Canada caused the stock market to fall and is grabbed in digital assets.
With the Fear & Greed Index on 15 and liquidations of more than $ 1 billion, the environment remains loaded.
While Bitcoin floats around $ 83,400, traders look closely to see if the market finds stable or heads for a deeper slump.
In the coming days, it will be crucial to determine whether this withdrawal is a short correction or the start of a long -term decline.
