Crypto Market Declines for Third Day as Tariffs and Inflation Spook Investors

The cryptocurrency market dipped for a third consecutive day heading into the weekend, as investors responded to ongoing uncertainty surrounding President Trump’s upcoming tariff decisions and concerning inflation data.

At the time of writing, Bitcoin (BTC) had decreased by 3.2% over the past 24 hours, trading at approximately $84,351. Meanwhile, Ethereum (ETH) fell 6.5% to $1,890, while XRP dropped 6.5% to $2.20. Solana (SOL) also declined by 6.5% to $130.

According to CoinGecko, the total cryptocurrency market capitalization declined by 4.5% in the past 24 hours, reaching $2.84 trillion. During the same period, total liquidations amounted to $427.5 million, with Ethereum (ETH) leading with $132 million, followed by Bitcoin (BTC) at $100 million, CoinGlass data shows.

Disappointing Macroeconomic Data

“Today’s crypto pullback was catalyzed by a sharp ETH-led drawdown, triggering broader risk-off behavior across digital assets and accelerating market-wide deleveraging,” Mike Cahill, CEO at Douro Labs, told The Defiant.

He added that this bearish momentum collided with higher-than-expected Personal Consumption Expenditures (PCE) and Core PCE inflation data, which compounded risk-off sentiment in traditional finance (TradFi) markets and “ultimately reinforced a bearish tone across both asset classes.”

On Friday, the core personal consumption expenditures (PCE) index revealed that annual inflation reached 2.8% last month – significantly above the Federal Reserve's 2% target. Economists had predicted a 2.7% increase in core PCE.

Trump’s Tariffs

Additionally, investor sentiment remains highly cautious as a result of the upcoming US tariff policy decision on Apr. 2, Cahill explained.

Over the past two months, Trump has announced a series of tariffs to be imposed on several nations – including China, Canada, and Mexico – potentially impacting US trade relationships around the globe. Most recently, the president announced new 25% tariffs on foreign-made cars and auto parts, set to take effect on Apr. 3.

This adds “a whole new level of geopolitical uncertainty that’s prompting many market participants to stay risk-averse and maintain defensive positioning,” Cahill said.

ETF Outflows vs Inflows

Investor caution can be further observed in the exchange-traded fund (ETF) space. On Mar. 27, US spot BTC ETFs recorded inflows of $89 million, marking the tenth consecutive day of inflows. These inflows have now surpassed $1 billion in total, according to SoSoValue data.

In contrast, ETH ETFs experienced outflows of $4.2 million on Mar. 27, which marks the thirteenth consecutive day of outflows.

“What we have right now is a market that’s currently contending with both endogenous drivers like the ETH liquidation event, and exogenous macro headwinds such as sticky inflation and geopolitical uncertainty, contributing to the broader drawdown in crypto valuations,” Cahill said.