Crypto prices are experiencing a decline as concerns regarding the Federal Reserve’s decisions and Donald Trump’s tariff policies create uncertainty in the market. Bitcoin, Ethereum, and Solana are holding critical support levels, yet traders remain cautious amid rising global trade tensions and inflation risks.
The cryptocurrency market dropped 4.2% over a 24-hour period, resulting in a total market cap of just over $2.7 trillion. Despite Bitcoin, Ethereum, and Solana generally maintaining stability, the market sentiment suggests caution among traders.
Key Points:
- The market has not seen Bitcoin close above $90,000 in over a month, raising concerns about potential further losses in Q1 2025.
- If Bitcoin falls below $74,500, the market could see new lows in 2025.
This decline is largely attributed to tariffs imposed during Trump’s administration affecting trade relations with countries like China, Canada, and Mexico. Press Secretary Karoline Leavitt has stated that the Trump administration is attempting to negotiate favorable trade deals, aiming to mitigate concerns for U.S. farmers affected by ongoing trade disputes.
Kevin Hassett, Director of the National Economic Council, suggested that the administration may soon announce new trade agreements. However, Trump’s social media statements have left investors unsure about the future of these tariffs.
Atlanta Fed President Raphael Bostic described the U.S. economy as being in a “big pause,” stemming from the uncertainties surrounding government trade policies.
The next few weeks will be critical for the crypto market, particularly with the upcoming expiration of the 90-day tariff pause. The volatility of Bitcoin and other cryptocurrencies may lead to further price fluctuations.
In summary, a combination of trade policy uncertainty and Fed signals is putting pressure on the cryptocurrency market, affecting investor sentiment and market dynamics.
