Inside the Crypto Crash: The Tariffs and Signals You Need to Know

Updated Monday 3 February 2025 17:0
Inside the Crypto Crash: The Tariffs and Signals You Need to Know
The cryptocurrency market saw a severe decline after Trump's tariff announcement, with significant losses recorded by Bitcoin (BTC), Ethereum (ETH), and other top cryptocurrencies.

This catastrophe, which destroyed around $500 billion from the cryptocurrency market, has generated discussion about whether Trump's recently implemented tariffs were the only cause or whether the market was simply overbought.

According to some commentators, this could be the beginning of a significant correction to the recent advances in the price of bitcoin. Additionally, the analyst claims that because there were so many "top signals" circling, the cryptocurrency market was already on the verge of a meltdown.

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Top Signals: Crypto Market Overheating?

The argument about possible "top signals" also suggests that the cryptocurrency market was already at the height of this cycle, even though Trump's tariffs are one rationale. The term "top signal" refers to occurrences and happenings in the cryptocurrency sphere where the market appears to be fully exposed to the general public. Examples of these include the highest activity in cryptocurrency apps, celebrity endorsements of cryptocurrency projects, and a completely bullish change in market sentiment.

Top indications are currently causing a significant sell-off in the cryptocurrency market. Some of them at the center of matter are as follows:

  • Trump's Memecoin Launch: On January 18, President Donald Trump introduced his own memecoin, TRUMP, which garnered significant attention in the financial industry. Millions of retail investors in the United States and every other nation were drawn to this action.
  • Crypto Apps Getting Into the Top Charts Crypto bullruns tend to climax when retail adoption reaches a new high and people are very active. As a result, more mobile apps are downloaded and used.
  • Sequential All-Time Highs: In the last three months, the price of bitcoin has reached several new all-time highs. In the past, Bitcoin has frequently seen steep declines when it reaches such unsupportable highs without corrections.
Although Trump's action undoubtedly shook financial markets and made investors more apprehensive and risk averse, it is not entirely to blame for the sharp sell-off. Global trade restrictions have historically caused economic slowdowns by making investors avoid riskier assets, such as cryptocurrency.

Traders are keeping a careful eye on important support levels for Ethereum and Bitcoin as the cryptocurrency market enters a very volatile phase. The pessimistic trend may go much longer if protracted trade disputes worsen macroeconomic and geopolitical situations.
 




 

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