Crypto Market Slides as Uncertainty Spreads – What to Expect?
The cryptocurrency market is experiencing a significant decline, reflecting investors' concerns about economic fluctuations and new policies from the US government.
Cryptocurrency Markets in Red
Bitcoin (BTC), the leading cryptocurrency, fell 5.35%, reaching $80,120 at one point before recovering slightly to $82,900. Ethereum (ETH) lost 13%, while XRP and Pi Network (PI) recorded the sharpest declines, down 18.3% and 14.67%, respectively. The total cryptocurrency market capitalization fell 5% to $2.71 trillion. The Bitcoin Fear and Greed Index fell into the "extreme fear" zone at 20, indicating that pessimism is pervading the market.
Economic policy and tariffs raise concerns
The decline comes after the Trump administration announced plans to impose new trade tariffs on multiple countries, raising concerns about a global trade war. The new tariffs could target as many as 25 countries, with a 20% tariff on each individual country, according to the report, destabilizing international trade and triggering retaliation from major economies.
Recession concerns and market impact
In addition, concerns about a US recession are rising. Goldman Sachs has raised the probability of a recession to 35%, from 20% previously, over the next 12 months, due to uncertainty over tax policy, persistent inflation and weakening consumer and business confidence in the US.
Market Forecast and Outlook
Analysts warn that the cryptocurrency market could continue to be pressured by tariff policies and recession fears until at least April 2025. Only diplomatic breakthroughs or a softening of the Trump administration’s stance could reverse the current downward trend.
In this context, investors should be cautious and closely monitor economic and policy developments to make appropriate investment decisions.