The crypto market has continued its downturn, with Bitcoin falling below $87k and returning to previous lows. This comes amid new trade war fears between the United States and Canada.
Will the Crypto Market Rebound or Crash Further?
Traders are now witnessing losses on their assets as bearish sentiment returns to the market. As of press time, the market has seen a major downturn with Bitcoin and altcoins trading below previous highs. The BTC price broke its resistance level and fell as low as $86k over the weekend.
A major reason this happened in the crypto market was President Trump’s threat of 100% tariffs on Canada over claims of participating in a trade deal with China. Since then, $100 million has bled out of the market.
🚨BREAKING🚨
$100,000,000,000 HAS BEEN WIPED OUT OF THE CRYPTO MARKET TODAY. pic.twitter.com/pKaNjD9Xw2
— Ash Crypto (@AshCrypto) January 25, 2026
Meanwhile, Canada has responded that they do not intend to make any deal with China amid the new threats. Also, fears of a potential Government Shutdown has led to waning investor confidence. It was reported that the funding bill to maintain the operations of federal agencies has yet to be passed.
Last week, the House of Representatives passed the final bill on the federal government measures. It was then passed to the Senate for further proceedings. However, reports say the Democrats have refused to support the progress amid the national outrage over the shootings that happened in Minneapolis.
Apart from the crypto market bearish sentiment, the proceedings on major crypto polices would be halted if this happens. For example, the CLARITY Act has been on the agenda of the Senate, and another shutdown means the progress could stall for more weeks. This could erode investor confidence and lead to a further decline in Bitcoin’s price.
Key U.S Economic Events That Can Influence The Market
The current sentiment could change amid favorable economic developments. On Wednesday, the Federal Reserve is set to have its first FOMC Meeting of the new year. As usual, they would deliberate on whether to keep the current rates steady or make another cut. The last Fed rate cut was made last December, matching expectations.
Buckle up for a huge week ahead:
1. Markets React to 100% Canada Tariff Threat – Tonight
2. Markets React to 75% Chance of Govt Shutdown – Tonight
3. January Consumer Confidence data – Tuesday
4. Fed Interest Rate Decision and Press Conference – Wednesday
5. Microsoft, Meta,…
— The Kobeissi Letter (@KobeissiLetter) January 25, 2026
At the time, the committee lowered the target range by 25bps to 3.5% and 3.75%. Meanwhile, many experts are predicting that no January Fed rate cut will be made due to recent cuts as the crypto market awaits impact.
Another event many investors are watching is the December PPI Inflation data set to be released. Usually, the Bitcoin price reacts to the metrics, especially when inflation rises. For instance, the November PPI inflation data came in well above expectations at above 3%. This kept the market in its bearish phase at the time, as token price movement stalled
Source: https://coingape.com/why-is-the-crypto-market-down-today-jan-26/