Following Trump’s tariff impulsion, the crypto market witnessed a sharp downturn with Bitcoin (BTC), Ethereum (ETH) and other leading cryptocurrencies seeing drastic losses.
This crash – which wiped out nearly $500 billion from the crypto market – has sparked debate behind its potential reason whether it was all due to Trump’s newly imposed tariffs or the crypto market was really overbought.
Some analysts believe that the recent gains in BTC price ought to face a major correction and this could be the starting of it. “Besides, the crypto market was already on the edge to bust after so many ‘top signals’ were hovering around,” says the analyst.
Top Signals: Crypto Market Overheating?
While Trump’s tariffs are one possible explanation, the argument on potential “top signals” also implies that the crypto market was already at the peak of this cycle. Top signal is the terms referring to events and happenings in crypto space where the market seems fully exposed to retail public, such as crypto apps witnessing highest activity, celebrities endorsing crypto projects and market sentiment turning utterly bullish.
The crypto market is currently abuzz with top signals that are triggering major sell-off. Following are some of it at the center of matter;
- Trump’s Memecoin Launch – President Donald Trump launched his own memecoin, TRUMP on 18th January which made major headlines in the finance space. This move caught the attention of millions of retail investors in the U.S. and all other countries.
- Crypto Apps Entering Top Charts – It is often found that crypto bullrun peaks when retail adoption hits new high and people are found much active. This leads to increased usage of mobile apps and downloads.
- Sequential All-Time Highs – Bitcoin price has recently hit multiple new all-time highs over the past 3 months. Historically, when Bitcoin hits such unsustainable highs without corrections, they often experience sharp pullbacks.
There is no doubt that Trump’s move has rattled financial markets, increasing uncertainty and risk-off sentiment among investors but it’s not solely responsible for the drastic sell-off. Historically, global trade restrictions have led to economic slowdowns with it causing investors to shift away from risk assets, including cryptocurrencies.
The crypto market has currently entered into a much volatile phase and traders are closely watching key support levels for Bitcoin and Ethereum. If geo-political and macroeconomic conditions get worse due to prolonged trade conflicts, the bearish trend could sustain much longer.
Read: Bitcoin Price Drops to $92K as Trump Imposes New Tariffs
