Crypto Market Slips as Macro Fears Dampen Investor Sentiment

The cryptocurrency market recorded mild losses on Tuesday, following a week of volatility after President Donald Trump announced tariffs on China, Mexico and Canada.

Bitcoin (BTC) dropped 2% in the past 24 hours, currently trading around $95,700. Meanwhile, Ethereum (ETH) slipped 2.4% to approximately $2,620. XRP dipped 2%, while Solana (SOL) declined 3% to $197, according to CoinGecko data.

The overall cryptocurrency market capitalization dropped by 2.7% in the past 24 hours to $3.27 trillion. In the same period, 105,734 traders were liquidated for a total of $175 million. Altcoins accounted for approximately $28 million in liquidations, while ETH and BTC both contributed $22 million, according to CoinGlass.

Macroeconomic Uncertainty

Tracy Jin, Vice President of cryptocurrency exchange MEXC, attributes the market's movements primarily to the Federal Reserve's recent decision to leave interest rates unchanged, along with broader macroeconomic concerns.

“Statements on the upcoming protective tariffs of the United States on imports from its largest partners — Canada, Mexico, and EU countries raise concerns about the start of trade wars, which leads to investor caution in financial markets,” Jin said. “In conditions of uncertainty, investors often seek refuge in safer assets, such as the US dollar.”

Jin noted that this temporary strengthening of the dollar is usually accompanied by a decrease in interest in risky assets, including cryptocurrencies. Jin also explained that Trump's policy will unlikely affect the crypto world globally, “but the Fed's actions are systemic, and they directly affect what is strengthening in the market — the dollar or risk assets.”

Binance Activity

While macroeconomic factors continue to weigh on the market, reports of activity on major exchanges, particularly Binance, have also drawn investor attention.

According to an X post shared by Wu Blockchain, Binance's BTC holdings dropped from 46,896 to 2,747 between January and February 2025. ETH holdings also plunged from 216,313 to 175, with most of these assets converted to USDC.

“It may be a profit accrual at the beginning of the year,” the X post noted. “Similar situations occurred in June 2023 (paying a fine) and February 2024.”

In response, Binance noted early Tuesday that it is, in fact, not selling assets. “This was simply an adjustment in the Binance treasury’s accounting process,” the exchange revealed. “User funds are SAFU as always.”

ETH Moves off Exchanges

Amid these developments, ETH also experienced a spike in exchange outflows.

According to data from Santiment, ETH experienced a historic milestone between Feb. 8 and Feb. 9, with approximately 224,410 ETH moving away from exchanges in just 24 hours. This marks the largest net outflow from known exchange wallets in a single day in 23 months.

“Though more of a long-term metric, this is a strong sign for Ethereum's struggling price,” Santiment noted in a post on X. “When assets are moving away from exchanges, it is typically a signal of confidence by investors, who are content with holding for the long-term.”