March 28th saw a significant decline in the cryptocurrency market with a 4% loss in market capitalization. Primary factors include trade wars and rising inflation.
Trade Wars Escalation and Its Impact
The cryptocurrency market has been significantly impacted by rising global trade tensions. The US announced 25% tariffs on auto imports and other goods from Canada, Mexico, and China, effective April 3rd. This move has raised fears of a global economic slowdown, negatively affecting all asset classes.
High Inflation Amplifies Concerns
The release of the US Core PCE Price Index data added to market anxiety. The index increased by 2.8% year-over-year in February, exceeding expectations. This heightened concerns over tightening monetary policies, negatively impacting the cryptocurrency market.
Impact on AI Tokens
The artificial intelligence sector, though a rising star in the crypto space, has also suffered. Currencies like NEAR, Bittensor, and Render fell by 10.8%, 10%, and 8% respectively, highlighting the vulnerability of emerging narratives in the face of broader market uncertainties.
Current market conditions require traders to exercise caution and focus on risk management. Prepare for sustained volatility ahead.
