The cryptocurrency market faced a sharp downturn on Monday, shedding $230 billion in value as Bitcoin (BTC) dipped below $92,000. This follows US President Donald Trump’s announcement that tariffs on Mexico and Canada are set to begin on March 4, fueling concerns over global trade.
Trump’s Tariffs Prompt Widespread Market Sell-off
In a press briefing, President Trump confirmed that new tariffs on goods from Mexico and Canada will be implemented as scheduled, with a 25% levy on most goods and a 10% tariff on Canadian energy resources, including oil and natural gas. These developments have introduced uncertainty into global trade dynamics, leading to a market sell-off that saw Bitcoin fall below the $92,000 mark, representing a significant 8% decline across the cryptocurrency space.
The broader market capitalization of cryptocurrencies has contracted by approximately $230 billion, reflecting the heightened volatility. On the futures side, liquidations have surged, with nearly $1 billion in positions being cleared, primarily in Bitcoin, Ethereum (ETH), and Solana (SOL), according to Coinglass data. Additionally, Bitcoin exchange-traded funds (ETFs) saw a notable $571 million in outflows last week, marking the second consecutive week of investor withdrawals, as reported by CoinShares.
Market Sentiment Weakens Amid Tariff Concerns
Investor sentiment appears to have softened in response to both the tariff announcement and macroeconomic uncertainties, contributing to an overall decline in crypto demand. Bitcoin’s investor activity has taken a hit, with demand turning negative for the first time since September 2023, as indicated by CryptoQuant. This trend follows a slowdown in active wallets and transaction volumes, signaling a shift in investor confidence.
Despite the short-term challenges, Bitcoin maintains a long-term bullish outlook. Analysts suggest that if market uncertainty persists, Bitcoin could enter another prolonged consolidation phase, reminiscent of the market stagnation seen in early 2024.
Solana and Altcoins Suffer Significant Losses
In addition to Bitcoin, major altcoins have also experienced heavy losses. Solana (SOL) saw its price fall by over 15% in the past 24 hours, driven in part by concerns surrounding the impact of meme coin activity on its blockchain. A recent hack on the Bybit exchange, allegedly orchestrated by the North Korean Lazarus Group, has further compounded the issue. Investigations by crypto researcher ZachXBT revealed that some of the stolen funds are linked to the launch of various meme coins on Solana’s blockchain under the “Pumpfun” project. This association has raised concerns about the security of the Solana network, dampening investor sentiment and further driving down the price of SOL.
As the crypto market continues to grapple with the effects of external macroeconomic factors and security concerns, the road ahead remains uncertain, with volatility expected to persist in the short term.
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