In a shocking turn of events, Ethereum has experienced a dramatic 37% drop in just 60 hours following the latest trade war headlines. The cryptocurrency market is in turmoil, with Ethereum’s value plummeting from $3,000 to $2,100 before slightly recovering to around $2,500. This unprecedented decline has left investors reeling and searching for answers.
So, what triggered this massive sell-off? The catalyst appears to be the announcement of new tariffs by President Donald Trump targeting imports from China, Canada, and Mexico. These tariffs have sparked fears of escalating global trade wars, prompting investors to pull back from riskier assets like cryptocurrencies. The ripple effect was immediate, with markets registering significant losses shortly after the announcement.
The situation in the crypto market has been exacerbated by a lack of strategic initiatives such as a Strategic Bitcoin Reserve or common-sense crypto regulations. Instead, the market has faced “Digital Asset Stockpile,” trade wars, and even the emergence of two presidential memecoins. As a result, Bitcoin has dropped below $100,000, trading just above $93,000, down 7% tonight alone.
How are other cryptocurrencies faring? Bitcoin’s decline is just the tip of the iceberg. Peter Schiff, a well-known critic of cryptocurrencies, highlighted the steep drop in Ethereum, noting that it was down 20%, trading below $2,500. He mentioned that it even hit $2,100, down about 33% in one night. Schiff’s comments echo the sentiment of many investors who are now questioning the stability of cryptocurrencies.
What are the potential implications for investors? The steep decline in Ethereum’s value has led to significant liquidations, with long positions losing approximately $613.72 million. This has raised concerns about the stability of leveraged bets in the crypto market. However, historical patterns suggest that such fear can often lead to buying opportunities for those who believe in the underlying value of cryptocurrencies.
This is insane:
Ethereum just fell -37% in 60 hours since the trade war headlines mid-day on Friday. pic.twitter.com/6UoIIinJqP
— The Kobeissi Letter (@KobeissiLetter) February 3, 2025
In case you haven't noticed, Bitcoin is down 7% tonight, trading just above $93,000, but Ethereum is crashing. It's down 20%, trading below $2,500, but an hour ago it hit $2,100, down about 33% in one night! It looks like Punxsutawney Phil was right about that long crypto winter.
— Peter Schiff (@PeterSchiff) February 3, 2025
Sources:
https://finance.yahoo.com/news/bitcoin-drops-below-100-000-080206194.html
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