Analysis of the cryptocurrency decline in the last few days
Digital currencies experienced a bad decline and the market turned red and the price of Bitcoin fell below $100,000 once again.
With the fall of Bitcoin, the major altcoins in the cryptocurrency market experienced further correction yesterday. Ethereum, the largest altcoin in the cryptocurrency world, fell by 7%. In just one day, the price of Ripple fell by 7% to below $3, Solana fell by 9% to below $215, and Dogecoin fell by 9% to below 0.31. However, the price of Ethereum rose by 2% yesterday and reached $3,315.
It is worth noting that White House spokeswoman Karoline Leavitt said at a press conference on Saturday when announcing the Trump administration's decision to impose import tariffs: The tariffs will be 25% for Mexico and Canada and 10% for China. She added that the tax law will be implemented from Saturday.
Our analysts have linked the deep correction in Bitcoin to this news, as tariffs can indirectly put pressure on the price of Bitcoin by strengthening the US dollar in the short term.
But the reason we didn’t see such a drop yesterday was because global markets were closed yesterday and the impact of Trump’s tariffs on global markets had not yet shown itself.
Today, with global markets opening, traders began to price in the effects of these tariffs.
Also, whispers from the Federal Reserve make it difficult to break the psychological resistance of $110,000 so easily.
Officials of this financial institution expressed concern at the December Federal Reserve policy meeting that reducing inflation to the 2% target may face challenges under the new presidency. Possible changes in immigration and trade policies could affect inflation forecasts.
Our analysts believe that with these policy changes, capital flows in the markets may also be affected soon, as protective tariffs usually lead to a reduction in capital market flows.