Bitcoin's chaotic surge: Tariffs, hacks, and a $1 trillion market upheaval - Metaverse Post

Bitcoin has plunged below the $80,000 mark but is clawing back to the $90,000 range as a massive crypto sell-off wipes out an astronomical $1 trillion from the global market—creating fears that the situation may worsen.

The drastic decrease represents a 25% drop from Bitcoin's all-time high of nearly $110,000, startling seasoned investors and  insiders sounding the alarm due to fears of potential 'price suppression'.

With analysts advising traders to resist the pressure to 'buy the dip,' attention has turned to the underlying causes of this dramatic decline in crypto values—raising questions about whether this correction could escalate into a full-blown market disaster.

What Went Wrong?

In a surprising move, President Trump announced a sweeping 25% tariff on imports from Mexico and Canada, which is set to take effect on Tuesday, catching global markets off guard. This unexpected shift quickly redirected investor attention from risk-laden assets like cryptocurrencies to the broader economic ramifications stemming from escalating trade tensions.

In tandem with a considerable drop in U.S. equity markets that had recently reached record highs, analysts primarily attributed the sharp crypto downturn to Trump's intensifying trade conflict.

Agne Linge, the growth lead at the decentralized bank WeFi, remarked that the Crypto Fear & Greed Index had plummeted to 21, its lowest score since September, indicative of increasing anxiety among traders.

The timing of the tariffs only exacerbated the existing economic uncertainty. After months of declining inflation, the sudden threat of higher import prices sparked fears of a resurgence in consumer costs.

In reaction to these developments, many investors began to speculate that the Federal Reserve might consider raising interest rates to combat any inflationary spikes induced by changes in trade policy.  hold interest rates steady at 4.5% Meanwhile, James Toledano, co-founder of Unity Wallet, noted that many within the crypto sector were left feeling disillusioned by Trump's recent actions.

Ruslan Lienkha, head of markets at the bitcoin and crypto platform YouHodler,

Experts Alarmed by the Downfall

highlighted that $70,000 could become a critical support level for Bitcoin. However, Lienkha emphasized that the cryptocurrency would likely only reach this level if negative sentiment continued to prevail in the equity markets.  pointed to technical analysis Despite a series of losses in U.S. stocks, Lienkha advised caution, suggesting it was too premature to conclude that the broader market ascent had completely reversed, emphasizing that current losses could merely signal a regular market adjustment.

Markus Thielen, founder of 10x Research, noted that the current movement of Bitcoin's price aligns closely with an ascending broadening wedge pattern, which usually indicates a potential target in the low $70,000 arena.

The overall market volatility was further intensified by the recent hack of Bybit, one of the largest cryptocurrency exchanges. This incident, now recognized as one of the most significant crypto thefts in history, unsettled investors who were already on edge due to recalibrated inflation fears and the Fed's recent pause on interest rate cuts.  echoed similar concerns Jeff Mei, COO of BTSE, explained that the Bybit breach had

Bybit Hack Piling On

shaken market sentiments. He stated that overarching macroeconomic variables, including persistent inflation and uncertainties regarding U.S. monetary policy, have also contributed to the drop in investor confidence.  a $1.5 billion hack targeting Bybit Despite the ongoing decline, some cryptocurrency investors maintain a sense of optimism as they anticipate potential regulatory shifts under the Trump administration.

This includes an executive action to establish a national cryptocurrency reserve  triggered heightened volatility along with initiatives to promote innovation in the cryptocurrency sector within the United States.

Trump’s Policies: A Silver Lining?

To better define the legal framework for digital assets, his administration has also assembled specialized task forces, including the appointment of a 'crypto czar.'

Not so long ago, the president issued   Geoffrey Kendrick, leading digital assets research at Standard Chartered, suggested during a segment on CNBC’s Squawk Box Europe that Bitcoin could still reach over $200,000 before the end of the year. He attributes this optimistic forecast to increasing institutional adoption and the anticipated clarity that may arise from the administration's evolving cryptocurrency policies. On Sunday, President Donald Trump unveiled plans for the U.S. government to create a national strategic cryptocurrency reserve that comprises

. Trump reiterated his goal of positioning the U.S. as the 'crypto capital of the world.'

an expert panel is progressing with plans to set up the reserve—a promise he made to cryptocurrency advocates during his election campaign.

Crypto Reserve to the Rescue?

Initially, Trump included XRP, Cardano, and Solana in the proposed national crypto inventory. However, about an hour later, he followed up with a clarification post stating that Bitcoin (BTC) and Ethereum (ETH) would also be integral to the reserve, given their significant market capitalization.  five key cryptocurrencies In response, markets reacted positively to the announcement, with Cardano surging nearly 60% —

On Truth Social, Trump  explained before settling back to approximately $0.99 by Wednesday. Solana jumped from about $141 to $178, while XRP rose roughly 20%, climbing from $2.23 to $2.96, currently resting at $2.48.

At the same time, Bitcoin reached $94,000, up from around $86,000, before experiencing fluctuations.

Legendary trader Peter Brandt recently shared his perspective on the current state of bitcoin and stock markets via social media channels. He pointed out that the extreme volatility over the past week has provided significant profit opportunities, alongside considerable risks for traders.  jumping from $0.64 to $1.13 His insights underline an essential trading principle: volatility can either present traps or opportunities. Effective risk management and long-term strategies become even more crucial as some traders benefit from the market's erratic nature, while others face severe losses.

Meanwhile, CryptoQuant analyst Axel Adler explained that for Bitcoin to regain its all-time high, a substantial bullish momentum is essential. This would necessitate a breakthrough above the Short-Term Holder (STH) Cost Basis, estimated to be around $90,000 to $91,000, and a sustained position above that threshold to restore investor trust.  settling just around $90,000 .

Is an All-Time High Possible in 2025?

Considering this, traders may need to exercise patience, as Bitcoin might enter a drawn-out sideways trading phase over the next couple of months—an occurrence that has been typical in previous market cycles.

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Alisa, a passionate journalist at Cryptocurrencylistings, specializes in cryptocurrency, zero-knowledge proofs, investment strategies, and the expansive world of Web3. With a sharp eye for emerging trends and technologies, she delivers in-depth coverage to inform and engage readers in the fast-paced realm of digital finance.

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