The cryptocurrency market has experienced significant volatility in response to global trade policy changes. Initially, the market reacted negatively to the announcement of new tariffs on goods imported from Canada, Mexico, and China. However, a subsequent decision to pause the tariffs on Canada and Mexico led to a swift rebound, restoring investor confidence.
When the proposed tariffs were first announced, major cryptocurrencies saw sharp declines. Bitcoin fell below the $100,000 mark, reaching a low of $96,800, while Ethereum and other altcoins also took a hit. The uncertainty surrounding trade relations contributed to a broader risk-off sentiment across financial markets.
so this is what a black swan event looks like#cryptomarket #bitcoin #trump pic.twitter.com/h9JNKcZP8W
— HodlFM Team (@Hodl_fm) February 3, 2025
Market Rebound Following Tariff Pauses
After negotiations, U.S. officials agreed to temporarily suspend tariffs on Canada and Mexico. Leaders from both nations confirmed a 30-day pause, allowing time for further discussions on trade security and economic cooperation. This policy shift reassured investors, leading to a rapid recovery in the crypto market.
I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly…
— Justin Trudeau (@JustinTrudeau) February 3, 2025
Bitcoin rebounded past $100,000, recovering from its previous drop, while Ethereum climbed back above $2,800. Market sentiment, as reflected in the Crypto Fear & Greed Index, shifted from fear to optimism, indicating renewed investor confidence.
Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025
1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
Analyst Insights
Market analysts believe the tariff pause has alleviated some economic uncertainty, allowing digital assets to regain lost ground. Some experts suggest that Bitcoin could reach new all-time highs if favorable economic conditions persist and further tariff escalations are avoided.
Additionally, discussions around a potential sovereign wealth fund supporting digital assets have fueled optimism. The nomination of key policymakers with a positive stance on cryptocurrency regulation has further strengthened bullish sentiment.
Despite the positive developments with Canada and Mexico, tensions between the U.S. and China remain high. China has announced retaliatory tariffs on American imports, including key energy commodities.
JUST IN: 🇨🇳🇺🇸 China to impose retaliatory 10% tariff on US oil and agricultural equipment. pic.twitter.com/VsOZ3dULyD
— Remarks (@remarks) February 4, 2025
This move has introduced additional volatility into the market, with Bitcoin experiencing price swings as investors react to shifting economic policies.
HODL Team
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