The main decline began around 5:00/6:00 PM, and by morning Bitcoin had regained its positions but later fell again below the psychological level.
According to Coinglass, over the past 24 hours, the liquidation volume in the crypto market amounted to $540 million of which $482 million was attributed to long positions. At the same time, a large share of forcibly closed positions relates to low-cap altcoins from the “other” category.
The largest digital assets also demonstrated a drop. Ethereum fell below $3,100, decreasing by 6.6% over the day.
The hardest hit were SOL (-17.5%) and DOGE (-14.1%). ADA lost 9.8%, retreating to $0.88.
U.S. Tariffs and Responses from Other Countries
According to a statement from the White House on February 1, “Trump imposes a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China.”
“[The President] is taking bold action to compel Mexico, Canada, and China to fulfill their promises to stop illegal immigration and halt the flow of toxic fentanyl and other drugs into our country,” the statement said.
In response to the new tariffs, Canadian Prime Minister Justin Trudeau announced at a press conference plans to impose a 25% tariff on certain American goods.
According to CNN, the Ministry of Commerce of China is preparing to file a complaint with the World Trade Organization and “take appropriate countermeasures.”
President of Mexico Claudia Sheinbaum stated in a lengthy post on X that she instructed the Minister of Economy to “implement Plan B,” which includes “tariff and non-tariff measures to protect the interests of the country.”
“It turns out that Trump seems unafraid of economic and market fluctuations. His exact words: ‘There may be some temporary, short-term disruptions, and people will understand this.’ Based on the experience of 2018-2019, it is reasonable to expect at least a 10% correction in the stock market index,” journalist Colin Wu suggested.
So far, the S&P 500 and Nasdaq 100 indices have not shown significant declines. However, in the long term, Wu sees U.S. tariffs as negative for macroeconomics.
Impact on Cryptocurrency
Opinions on Trump’s tariffs’ impacts on the crypto industry within the community vary. Founder of Crypto Capital Venture Dan Gambardello considers the situation stable.
“I cannot believe there’s a popular opinion floating around that Trump tariffs and his memecoins ended the bull cycle. Blackrock is continuing to accumulate ETH and BTC while retail frantically panics because crypto is currently consolidating” Gambardello added.
Head of Alpha Strategies at Bitwise Invest Jeff Park noted that some “still do not realize what an amazing impact a tariff war will have on the first cryptocurrency.”
“Listen, buddy, I’m all for Bitcoin, but it’s not like that. Bitcoin is not sufficiently separated from global markets and trades as a technology with triple leverage these days. Economic contraction of such scale means only pain for everyone, and we must be ready to condemn this,” argued Cinnaeamhain Ventures partner Adam Cochran.
Source: https://coinpaper.com/7266/trump-s-tariffs-caused-a-correction-in-the-bitcoin-market