The cryptocurrency market faced a sharp downturn, erasing recent gains sparked by a U.S. crypto strategic reserve announcement.
Impact of Strategic Reserve Announcement
On Sunday, U.S. President Donald Trump announced the creation of a strategic crypto reserve, including ADA, XRP, and SOL alongside Bitcoin and Ethereum. This triggered a market frenzy, with ADA surging 60%, XRP climbing 33%, and SOL jumping 22%. However, the optimism was short-lived as profit-taking and market uncertainty set in.
Economic Factors Influencing the Market
The situation was exacerbated by tariff announcements targeting imports from Canada, Mexico, and China. Kevin Guo, director of HashKey Research, noted that 'Trump's latest tariff announcements caused a massive selloff of crypto assets, completely reversing the previous gains'. In response, China imposed a 15% tariff on various imports, while Trump doubled tariffs on Chinese imports to 20% and enacted 25% tariffs on goods from Mexico and Canada.
Expectations Before the White House Crypto Summit
Under macroeconomic uncertainty, Bitcoin slid 9% to $84,000, while Ethereum fell 12%, trading just above $2,000. As investors brace for market movements, all eyes are on the upcoming White House Crypto Summit scheduled for Friday, expected to provide clarity or potentially cause more volatility.
Investors anxiously await developments in the crypto market amidst macroeconomic tension and forthcoming events at the White House, which may dictate the future direction of cryptocurrencies.
