Hold onto your hats, crypto enthusiasts! The digital currency rollercoaster keeps dipping this week, hitting a 16-week low as of Friday. The crypto market cap has taken an 18% nosedive, dropping to $2.75 trillion—its lowest since the spooky season of October.
We've broken through support lines like a kid through a piñata, erasing gains since the November U.S. elections. A staggering $600 billion has vanished from the market just this past week. The culprit? President Trump's trade tariffs. His latest warning about slapping 25% tariffs on Mexican and Canadian goods by March 4, along with a looming 10% tax on China, has sent shockwaves through the market. Throw in some threats to the European Union, and you've got a recipe for crypto chaos.
Since these trade war jitters began on January 20, crypto markets have shed a jaw-dropping $800 billion. Trade tensions are like throwing a rock in a pond—they create ripples across all assets, including our beloved crypto. When liquidity dries up, many investors rush back to the ‘safety' of the U.S. dollar, making it the hot gossip of the financial world.
The Kobeissi Letter chimed in, calling the dollar the “safest risky asset” during these trade wars. As uncertainty looms, retail investors flee like it's a fire drill, causing massive outflows.
In the thick of it, CoinGlass reported a major shakeout on February 28. Over 200,000 traders got liquidated in just 24 hours, totaling a whopping $800 million. The biggest hit? A $38 million BTC/USDT trade on HTX.
Bitcoin took a dive below $80,000 during Asian trading on Friday, shedding another 6% and marking a 19% weekly loss. It's now down 26% from its January high. BitMEX founder Arthur Hayes predicts another wild ride below $80k over the weekend before things go quiet.
Ethereum hasn't escaped the turmoil either, dropping to just above $2,100—its lowest in over a year. With a daily loss of 9% and 23% since last week, ETH's in the same boat as other altcoins, which are also wiping out gains and revisiting bear market levels.
But hey, let's not lose hope! When you zoom out, the big picture shows that crypto markets have been on an upward trend since the end of the bear market in October 2023, even if they’re dipping below those peak cycle levels. So, fasten your seatbelts, because the crypto ride is far from over!
