Top cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) tumbled Tuesday amid a wider market sell-off triggered by former President Donald Trump’s “Liberation Day” tariff announcement.
The move spooked both crypto and equity markets, with investors pricing in the rising risk of recession following steep import tariffs on China, the EU, and key industrial materials.
Crypto Market Breakdown: Key Levels Breached
- Bitcoin fell 3.5%, nearing the critical $80,000 support level.
- Ethereum lost 2.71%, now trading around $1,765.
- XRP dipped 1.35%, slipping below the $2 threshold.
The total cryptocurrency market capitalization fell 4%, to $2.6 trillion, continuing a months-long decline that has erased over $1 trillion in value.
Wall Street Sell-Off Mirrors Crypto Losses
U.S. equities opened sharply lower, with tech stocks leading the retreat. Within the first 30 minutes of trading:
- Nasdaq: down 4.7%
- S&P 500: down 3.78%
- Dow Jones: down 3.4%
Markets reacted negatively to Trump’s unexpected tariff escalation, including:
- A minimum 10% tariff on all imports
- 34% tariffs on Chinese goods
- 24% on EU exports
- 25% on steel, aluminum, and industrial inputs
On Polymarket, odds of a 2025 U.S. recession surged to new highs.
“This isn’t a stagflation scare—it’s a full recession risk if these tariffs stay in place,” said a TS Lombard analyst.
Eyes on the Fed: Will History Repeat?
Historically, cryptocurrencies have mirrored equities during major shocks, but tend to rebound when central banks intervene.
- In 2008, the Global Financial Crisis triggered a long-term bull run post-Fed stimulus.
- In March 2020, both stocks and crypto plunged amid the COVID-19 panic—but recovered strongly after emergency rate cuts.
If recession signals intensify, the Federal Reserve could fast-track rate cuts. Some also speculate that Trump may authorize targeted bailouts, which could inject liquidity and provide short-term support for both traditional and crypto assets.
