YEREVAN (CoinChapter.com) — Trump tariffs on imports from China, Canada, and Mexico triggered a sharp sell-off in the crypto market. Ether (ETH), the second-largest cryptocurrency, dropped to $2,368 on Feb. 3. It later rebounded slightly to $2,534, but remains significantly lower than its 2024 peak of $4,078, recorded on Dec. 17.
Ether Price Drop Feb 3. Source: TradingViewAltcoins Crash as Crypto Market Cap Declines
The sell-off extended to major altcoins, with Avalanche (AVAX), XRP, Chainlink (LINK), Dogecoin (DOGE), and Cardano (ADA) all losing over 20% in the past 24 hours. The total crypto market cap declined 11.4%, falling to $3.17 trillion, based on CoinGecko data.
Crypto Market Decline Data. Source: CoinGeckoInvestors responded to Trump tariffs with mass liquidations, affecting trading volumes. The market had anticipated potential tariffs, but their impact had not been reflected in crypto prices before the announcement.
Crypto Fear & Greed Index Drops as Sentiment Weakens
The Crypto Fear & Greed Index fell 16 points to 44, moving into the “Fear” zone. This marks the first time the index has been this low since Oct. 11.
Crypto Fear & Greed Index. Source: Alternative.meAccording to 10x Research founder Markus Thielen, the sudden decline in altcoins resulted from stop-loss triggers and a lack of buying pressure from retail investors. He noted that trading volumes had been falling for weeks, signaling reduced investor confidence.
Stock Market Drop Contributes to Crypto Losses
The downturn in crypto prices coincided with a sell-off in U.S. stock futures. Nasdaq 100 futures dropped 2.7%, while S&P 500 futures fell 2%, and Dow Jones futures declined 1.5%.
Global Market Performance Overview. Source: finvizDeepSeek, a Chinese AI application that has recently risen to global prominence, has sparked widespread concerns over data privacy and national security. The controversy surrounding DeepSeek’s data practices has drawn global attention, influencing markets and diverting investor focus from other critical events like Trump’s tariffs. The app uses advanced algorithms to process vast amounts of personal information, raising alarms among regulators and privacy experts. Italy became the first major economy to ban DeepSeek, citing “insufficient” data protection measures. Meanwhile, South Korea and Australia are also scrutinizing the app’s practices, with officials warning users to exercise caution.
DeepSeek API Key Exposure. Source: WIZ ResearchThis regulatory attention follows growing distrust of Chinese tech companies, previously exemplified by the U.S. ban on TikTok under similar national security concerns. Thielen explained that investors had been focused on the DeepSeek news and did not fully price in the effect of Trump tariffs. This shift in focus also contributed to the rapid decline in crypto market prices.
Bitcoin Dominance Increases as Altcoins Struggle
While Bitcoin (BTC) also fell 6.8%, dropping to $94,743, it remained more stable than altcoins. As a result, Bitcoin dominance increased from 61.1% to 64%, based on TradingView data.
Current Bitcoin dominance. Source: TradingViewThielen observed that Bitcoin dominance rising without an overall market cap increase suggests that traders were moving out of altcoins into Bitcoin, seeking stability during uncertain conditions. The market reaction to Trump tariffs and the broader financial environment will likely influence further price movements.
The post Trump Tariffs Wipe Out Billions: Ether and Altcoins Crash Over 20% appeared first on Coinchapter.
