Major Coins Plumetted To 25% Of Their Value In Light Of A Trade War. Read more.

The year for Crypto traders started on a sweet note. The all-time high of crypto made many traders optimistic about the future. The crypto value crossed the record high of $100,000. However, this happiness was short-lived.

Soon after Trump’s aggressive trade tariff announcement, the crypto market saw a downward trend. Fearing the worst, people started liquidating their assets, which resulted in a cascading effect.

As soon as BTC started crashing, it slowly permeated its influence on the others. As a result, other cryptocurrencies noticed a rapid downward trend. Currently, coins like XRP and Dogecoin have suffered a major setback of around 25%.

Market In The Red 

As per data recorded by CryptoSlate, BTC’s downward bear movement started on January 31st. The value of BTC dipped from $105,000 to $102,000 in a matter of few hours. This decline was consistent and was recorded throughout the weekend.  

The alarming thing is that this is not an isolated event. Other alt counts like Ethereum, Solana, XRP, and Dogecoin joined the frenzy as well. Which has led the market to hover in a red zone, 

The Red Zone is generally referred to as a downward trend that is seen across the board. As a result, it can be a panic-inducing sight for traders. According to BitMEX’s co-founder, Arthur Hayes, this trend might sustain itself, and the overall prices of coins might fall further.  

Hayes wrote, “The beatings shall continue until morale improves. The pain stops when a TradFi outfit is on the verge of bankruptcy. Then the Fed reluctantly joins team Trump and prints that money.”   

Trump’s Tariff 

Market experts believe that Trump’s aggressive tariff plans have resulted in this downward turn. However, this will be a lopsided view of the whole deal. Though the market saw a sharp slump after the announcement, there were markers of a slump. 

As soon as the price hit $100,000, investors started cashing in. In other words, traders started liquidating their assets to maximize their profits. This trend started a vicious cycle. As a result, the updated tariff clause of the US only catalyzed the process.  

Liquidation Frenzy 

People were already liquidating when the prices were high. However, Trump’s decision worked like fuel to the fire. As a result, the announcement led to en-masse liquidation. In a matter of hours, the market was saturated with cryptocurrencies.  

As a result, over $2 billion in assets were in the market. Traders with long-standing investments took the biggest brunt as they hoped to ride the success wave. As per current data shared by Coinglass, people with long-term investments suffered a collective loss of $1.88 billion. 

Ethereum traders suffered the most as they experienced $611 million in liquidation. Out of which $447 million were long-standing investors. Next in line was BTC with a collective liquidation of $441 million, out of which $340 million were long-standing investments.  

The Final Thought: Is Crypto Viable? 

Given the current crypto landscape, the question of viability and stability looms. In other words, the possible trade war between the US, Mexico, China, and Canada might devolve into utter chaos. 

Hence, it is difficult to assess the viability of crypto as an investment means. All in all, the best and the only way to go about is to wait and see what the landscape offers.