Here is Why Bitcoin and Other Cryptocurrencies are Dipping
A cryptocurrency market crash saw Bitcoin fall below $100,000, Ethereum below $3,000, and widespread altcoin losses, fueled by bearish indicators and global market uncertainty, including new tariffs.
The past 24 hours have witnessed a significant downturn in the cryptocurrency market, characterized by a more than 7% overall decline with Bitcoin falling below the crucial $100,000 mark, and Ethereum dipping below $3,000.
Altcoins such as XRP and Solana are experiencing double-digit losses. The confluence of bearish technical indicators and escalating uncertainty has fueled this dramatic selloff.
Bitcoin Price Action Causes Ripple Effect
Bitcoin’s decline below $100,000, reaching a low of $96,000, signifies a significant shift in market sentiment. The ongoing selling pressure suggests further downward movement, with potential support at $92,000 and $90,000. This sharp drop has triggered widespread panic selling and liquidations, creating a domino effect throughout the market.
Ethereum, for example, plummeted below $3,000, with potential downside targets near $2,600 and $2,400. XRP, however, suffered the most significant blow, experiencing a decline of over 15% following its exclusion from Hong Kong’s approved cryptocurrency list, exacerbating the already negative market conditions.
Technically, Bitcoin’s breach of the $100,000 threshold triggered a cascade of stop-loss liquidations, further accelerating the downtrend. Solana also fell below $200, losing over 12% in a single day, demonstrating the pervasive nature of the market-wide collapse.
The current crypto market downturn is not operating in isolation. Global markets are also experiencing significant headwinds. The expectation of a negative opening for tech stocks further intensifies the pressure on the cryptocurrency market, potentially leading to more liquidations.
Tariffs Battle Plunge Market into Chaos
US President Donald Trump signed an executive order imposing import tariffs on goods from China, Canada, and Mexico.
A February 1 White House statement announced Trump’s implementation of a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will face a lower 10% tariff.
Prime Minister Justin Trudeau announced on Saturday that Canada will retaliate against President Donald Trump’s new tariffs with 25% levies on numerous U.S. imports. He warned Americans that Trump’s actions will have real consequences for them, according to Reuters.
These tariffs already triggered retaliation from the three countries, and the crypto industry remains divided on their impact on the broader market.
The statement declared Trump’s bold action to hold Mexico, Canada, and China accountable for their promises to halt illegal immigration and stop the flow of fentanyl and other drugs into the US.
Tariffs could increase inflation, leading to higher interest rates. This typically prompts investors to shift from riskier assets like crypto to more traditional assets such as bonds and term deposits.
