Cryptocurrency Market Posts Mild Losses Amid Trade Tensions

The cryptocurrency market recorded mild losses on Thursday, remaining volatile following President Donald Trump’s tariff announcement and subsequent pause.

Bitcoin (BTC) dropped 1.3%, trading at $96,000, while Ethereum (ETH) recorded a 3% dip, settling at $2,700. XRP experienced a sharp 6% decline to $2.30, and Solana (SOL) dropped 5%, trading at $189, according to CoinGecko data.

The overall cryptocurrency market capitalization declined by 2.6% to $3.28 trillion in the past 24 hours. During this period, 16,455 leveraged traders were liquidated, resulting in a total of $234 million in liquidations. BTC accounted for $46 million of the liquidations, while ETH contributed $39 million. The collective liquidations of altcoins totaled $36 million, according to Coinglass.

The recent downturn, analysts suggest, is part of broader market volatility driven by escalating trade tensions between the U.S. and other countries, including China, Mexico and Canada. Investor uncertainty has been heightened by President Trump’s announcements of tariffs on both Mexico and Canada, followed by a sudden pause.

Persistent Volatility

Antonio Di Giacomo, a Senior Market Analyst at XS.com, explained that following Trump’s agreement with Mexico President Sheinbaum, the market outlook briefly improved. However, he noted that despite the short-lived price rebound, volatility remains high, as seen in current trends.

“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.”

US-China Trade War

David Eng, an Investment Advisor at Harbourfront Wealth from the Sonora Wealth Group, highlighted that trade tensions between the U.S. and China are also contributing to market volatility.

Beijing on Tuesday targeted specific American goods with new taxes, among other actions, following Trump’s decision to impose a 10% tariff on Chinese imports to the US.

“Bitcoin was volatile and fell below the $100,000 threshold as increased market volatility prompted a shift towards safer assets,” he said. “Trade tensions between the U.S. and China have led investors to retreat from riskier assets like Bitcoin in favor of the US dollar.”

Eng noted that the current uncertainty could continue to fuel volatility in the crypto market, reflecting heightened caution among institutional investors.

“Despite these challenges, the cryptocurrency market could continue to find support from large market players,” he said, citing President Trump's recent executive order to establish a sovereign wealth fund. The development, he added, has led to speculation about the inclusion of Bitcoin in that fund, providing a bullish outlook for the asset.