Crypto Market Update: Bitcoin and Ethereum Plunge Amid Economic Uncertainty

The Week Starts with Another Set of Losses as Market Downturn Continues

The cryptocurrency market kicked off the week on a bearish note, with major assets experiencing another wave of losses. Bitcoin (BTC) has dropped below the crucial $100,000 mark, hitting a three-week low of $91,441.89, while Ethereum (ETH) is trading at $2,494.33—its lowest level since early September.

Market Overview

• Bitcoin (BTC): $94,452.00 (-5.95%)

• Ethereum (ETH): $2,494.33 (Lowest since September)

Bitcoin has dropped below the crucial $100,000 mark, hitting a three-week low of $91,441.89. Ethereum has also tumbled, trading at levels not seen in months.

Key Factors Behind the Decline

The downturn is primarily driven by investor concerns over a potential global trade war. President Donald Trump has imposed new tariffs:

• 25% on Mexican and most Canadian imports

• 10% on Chinese goods

These measures have led to retaliatory actions from Canada and Mexico, with China challenging the tariffs at the World Trade Organization.

Impact on Crypto Markets

As a highly volatile asset class, cryptocurrencies tend to react strongly to economic uncertainty. Initial optimism surrounding Trump’s election, due to expectations of crypto-friendly policies, has now been overshadowed by fears of inflation and market instability.

Investor Reactions

• Robert Kiyosaki: Advises investors to capitalize on lower prices, warning of a potential economic downturn and job losses.

• Sydel Sierra (Digital Wealth Group): Encourages a long-term perspective, urging investors to hold steady despite short-term market turbulence.

Regulatory Developments

India is reassessing its approach to cryptocurrency regulation due to shifting global perspectives. Economic Affairs Secretary Ajay Seth has emphasized the importance of an international regulatory framework, which could delay the country’s much-anticipated crypto discussion paper, initially planned for September 2024.

What’s Next?

All eyes are now on key U.S. economic data releases this week, particularly non-farm payrolls and unemployment figures. Strong job numbers could reinforce the Federal Reserve’s stance on keeping interest rates higher for longer, adding further pressure on both crypto and traditional markets.

However, some analysts believe the current selloff may be an overreaction. Peter Chung of Presto pointed out that Trump linked the tariffs to the fentanyl trade, suggesting they could be lifted if Mexico, Canada, and China implement stricter drug enforcement policies. If trade tensions ease sooner than expected, market sentiment could shift, leading to a rebound.

For now, volatility remains the dominant theme. With ongoing inflation concerns and no immediate signs of rate cuts, risk assets—including cryptocurrencies—are likely to face continued headwinds in the coming weeks.