Crypto Market Slips as Rebound Fizzles After Tariff Pause

The cryptocurrency market edged lower on Wednesday, giving up some of Tuesday’s gains, which were driven by the announcement of a pause on President Donald Trump’s trade tariffs on Canada and Mexico.

Bitcoin (BTC) is currently trading at $97,600, marking a 1.2% decline in the past 24 hours. Ethereum (ETH) dipped 2% to $2,740. Meanwhile, XRP fell 8% to $2.41, and Solana (SOL) dropped 7% to $198, according to CoinGecko.

The overall cryptocurrency market capitalization declined by 3.3% in the past 24 hours, dropping to $3.33 trillion. During this period, 99,390 traders were liquidated for approximately $314 million, with ETH accounting for around $121 million. BTC contributed $77 million, while altcoins collectively faced $26 million in liquidations, according to CoinGlass.

Persistent Volatility

The market’s pullback comes amid ongoing uncertainty surrounding U.S. economic policies and regulatory shifts. While Trump’s tariff pause provided temporary relief, investors remain cautious about heightened volatility, inflationary pressures, and upcoming legislative developments.

“With the agreement reached between [Mexico President] Sheinbaum and Trump, the market outlook took a positive turn,” said Antonio Di Giacomo, a Senior Market Analyst at XS.com. However, despite the price rebound, he warned that cryptocurrency market volatility remains high.

“Bitcoin continues to face challenges such as Federal Reserve monetary policies, government regulations, and the behavior of large investors,” Di Giacomo said. “Experts suggest that the $100,000 level could become a strong resistance in the short term, making sustained growth difficult without new catalysts.”

Trump’s Moves

The most recent catalyst that affected the stock market was Trump's declaring a 25% tariff on imports from Canada and Mexico, intended to curb illegal immigration and drug trafficking. In retaliation, Canada and Mexico introduced countermeasures.

However, Trump delayed the enforcement of the tariffs after talks with the leaders of both nations on Feb. 3. This provided some relief to the stock market, which recorded gains on Tuesday, though uncertainty remains high.

Still, some experts believe that this event marks the beginning of a new bullish cycle for Bitcoin, Di Giacomo said. “They argue that reduced trade tensions and increasing institutional adoption could push the cryptocurrency to new all-time highs in the coming months.”