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The market’s leading cryptocurrency, Bitcoin (BTC), and its peers, are grappling with increased volatility after a tumultuous week in financial markets, heavily influenced by President Donald Trump’s trade policies.
After a sharp decline, the leading cryptocurrency rebounded above the key $80,000 mark as uncertainty grew over a global economic recession that could have further weighed on digital asset prices.
Bitcoin Surges Past $84,000 After 90-Day Tariff Pause
The week began with Bitcoin dropping to a low of $74,000 on Monday, prompting concerns among investors. However, by Friday, the cryptocurrency had surged past $84,000, recovering 11% of its value in just a few days.
This rebound coincided with Trump’s announcement of a 90-day pause on certain tariffs, which alleviated some of the immediate market fears.
Other cryptocurrencies also saw significant gains during this period. XRP, for instance, climbed 20% to $1.99 after hitting a low of $1.66 earlier in the week.
Similarly, Solana (SOL) increased by 23%, reaching $120 after dipping to $97. Overall, the total market capitalization for the cryptocurrency sector grew to $2.59 trillion, a 10% increase from its earlier value of $2.35 trillion.
Crypto Market Reacts To Trump’s Tariff Reversal
The initial downturn in the crypto market was largely driven by apprehensions surrounding Trump’s proposed sweeping tariffs on almost all US trading partners, set to take effect on Wednesday. Investors reacted by offloading riskier assets like cryptocurrencies to safeguard their portfolios from potential economic fallout.
However, the situation took a dramatic turn hours after the tariffs were implemented. Trump decided to reverse some of his more aggressive tariff plans, maintaining a baseline levy of 10% on most countries while imposing additional tariffs on China, raising its total to 145%.
This reversal had a significant impact on the markets, with the S&P 500 experiencing its largest one-day gain since 2008, closing up 9.5%. Bitcoin benefitted as well, rising by 5% in the immediate aftermath of Trump’s announcement.
Despite the short-term relief, traditional markets faced renewed declines on Thursday, although they showed some recovery on Friday. Bitcoin remains down approximately 25% from its all-time high of $109,000 reached in January.
The ongoing volatility in both the cryptocurrency and traditional markets is largely attributed to the uncertainty surrounding trade policies and a slowing economy, as reported by Fortune.
Youwei Yang, chief economist at crypto mining company BIT Mining, noted the persistent volatility in the crypto space, stating:
The temporary 90-day pause brought some relief, but the market remains cautious. While this administration is pro-crypto, the broader crypto market is still searching for conviction, stuck in a bearish chop and waiting for clearer signals to regain momentum.
As of now, the market’s leading cryptocurrency trades at $84,760.
Featured image from DALL-E, chart from TradingView.com
