Bitcoin, Ethereum, Dogecoin Decline Following Trump's Tariff Announcement

The recent rally in the cryptocurrency market quickly faded as a confirmation of tariffs by President Donald Trump on Monday led to significant declines for leading digital currencies.

Cryptocurrency	Gains +/-	Price (Recorded at 7:30 p.m. ET)
Bitcoin BTC/USD	-8.09%	$86,051.25
Ethereum ETH/USD	-13.48%	$2,147.29
Dogecoin DOGE/USD	-15.69%	$0.1991

Following the announcement of the U.S. strategic cryptocurrency reserve, Bitcoin reached a peak above $95,000, but it then fell to an intraday low of $85,081 on Monday.

Ethereum followed suit, dropping over 13% to hit an intraday low of $2,097.08, and Dogecoin also reversed its gains, declining more than 15%.

This downturn resulted in a loss of $804 million from the entire cryptocurrency market within 24 hours, with $86 million in long positions being liquidated.

Conversely, more than $1 billion in short positions could face liquidation if Bitcoin bounces back to around $92,300.

Bitcoin's Open Interest saw a decline of 9.88% in the past day, while traders on Binance futures appeared to be optimistic, increasing long positions to comprise 69% of total bets.

The Crypto Fear and Greed Index fell into the "Extreme Fear" category, raising concerns about potential further sell-offs.

Current Market Trends

In the last 24 hours, the overall market capitalization in cryptocurrencies dropped by 9.27%, leading to a total of $2.84 trillion.

Major stock indices also experienced losses on the same day. The Dow Jones Industrial Average fell by 649.67 points (1.48%) to close at 43,191.24, while the S&P 500 decreased 1.76% to finish at 5,849.72. Meanwhile, the tech-centric Nasdaq Composite plunged 2.64%, ending at 18,350.19.

This wave of sell-offs was attributed to President Trump’s reiteration of tariffs on significant trade partners, including Canada, Mexico, and China.

Looking Ahead

Investors are now shifting their focus to the upcoming February jobs report, which is expected to provide insights into the strength of the U.S. economy.

Market analysts from the blockchain analytics firm CryptoQuant observed that short-term holders of Bitcoin are currently facing minor losses, which might encourage accumulation as prices trend downwards.

They indicated that, "For Bitcoin to retest its all-time high (ATH), a significant bullish movement is necessary, necessitating a break above the short-term holder cost basis level of $90,000 to $91,000, with sustained prices above this threshold to rebuild investor confidence."

Ali Martinez, a well-known cryptocurrency analyst, identified $97,000 as a crucial resistance level for Bitcoin, as around 2.27 million investors acquired more than 1.64 million BTCs at that price level. He noted that breaking through this resistance could pave the way for new all-time highs.

Bitcoin, Ethereum, Dogecoin