Recently, Bitcoin volatility has surged, reaching new peaks amid news about the US plans to create a crypto reserve and introduce trade tariffs.
Bitcoin Volatility Surge
Bitcoin's realized volatility, as reported by Glassnode, is nearing cycle highs, exceeding 80%. These levels have been reached in recent weeks in response to an uncertain political environment and trade tariff disputes.
Tariff Impact on Markets
On March 4, US President Donald Trump imposed tariffs of 25% against Canada and Mexico. This news shifted traders' sentiment, who had previously welcomed the potential creation of a US crypto reserve including tokens such as BTC, ETH, XRP, and ADA.
Traders' Reaction
Traders negatively reacted to the tariffs, causing Bitcoin to drop to $82,000 and altcoins to see significant markdowns. This was followed by over $1 billion in derivatives liquidations on the same day.
The dramatic volatility and abrupt market swings underscore the significance of macroeconomic factors and their impact on cryptocurrencies. It also confirms the complexity of forecasting Bitcoin prices amid uncertainty.
