Cryptocurrency prices have dropped sharply, linked to increased market volatility and tariff threats. The total market cap has fallen over 4% to below $3.6 trillion.
Cryptocurrency Decline Amidst Trade War
Bitcoin and most altcoins have been in the red, with tokens such as Virtuals Protocol, Bittensor, Neo, and Jasmycoin dropping over 15%. The primary cause is the risk-off sentiment in financial markets due to tariff threats, as President Donald Trump introduces a 10% tariff on Chinese imports and a 25% levy on Mexican and Canadian goods. All three countries have pledged to retaliate, risking a significant economic crisis.
Financial Market Volatility
The trade war has led to a significant increase in market volatility. U.S. benchmark indices like the Dow Jones, S&P 500, and Nasdaq 100 all dropped by almost 1%. U.S. inflation rose by the most in eight months, suggesting the Federal Reserve may not cut interest rates soon. This adds uncertainty, especially with the impact of tariffs on inflation.
Technical Analysis of Bitcoin Price
Bitcoin and other altcoins are in the red after Bitcoin formed a high-risk chart pattern, indicating further downside. It has formed a double-top pattern at $108,445, with a neckline at $88,940. The double-top is a popular bearish market pattern. A bearish divergence is also noted using the PPO and RSI indicators, indicating a potential drop to $88,940, particularly if the 50-day moving average support is lost.
The decline in cryptocurrency prices is driven by a combination of market volatility, tariff threats, and bearish technical patterns, raising concerns about further depreciation in Bitcoin and altcoins.
