Crypto market amid US tariffs

Market Overview

Cryptocurrency market capitalisation fell to $3.0 trillion against a peak of $3.62 trillion on Friday night. The main reason for the fall was the reaction of traditional finance to the duties imposed by the US on goods from Canada, Mexico, and China. A period of low liquidity prior to Asian trading led to a 17% fluctuation when robots and stop-orders dominated the market. Later in the European session, the market stabilised around the $3.11 trillion mark.

Bitcoin has lost more than 14% from last week’s peak, hitting a low near $91,000 at the start of trading on Monday. This collapse could lead to a break of support at the 50-day moving average. So far, bitcoin closed below it on Sunday, which intensified the sell-off. However, the close of trading on Monday will be decisive. A return above the $99,000 level could help accelerate the upside.

Bitcoin ended January up 8.7% at $101,700 and set a record high on the 20th, approaching $110,000. February is historically the best month for Bitcoin: over the past 14 years, it has risen on 11 occasions and declined only three times. The average rise was 27.6%, and the average decline was 20.3%.

Ethereum plunged to $2,090 at the peak of the decline, its lowest since early 2024. It later stabilised around $2,550, where it stayed for about four months in the second half of last year.

News Background

According to SoSoValue data, net inflows into spot Bitcoin ETFs in the US fell to $559.8 million last week after inflows of $1.76 billion a week earlier. Cumulative inflows since bitcoin-ETFs were approved in January 2024 rose to $40.50bn.

Net outflows from US spot Ethereum-ETFs totalled $45.5m last week after two weeks of inflows. Cumulative net inflows since the ETF’s launch in July fell to $2.76bn.

Glassnode analysts note that the current bitcoin bull market is inferior in strength to previous ones but similar to the 2015-2018 events, leaving room for further gains. They identified a slowing rate of price appreciation with each new cycle, indicating the maturity and depth of the market.

The US SEC has registered a combined bitcoin and Ethereum-based spot exchange-traded fund (ETF) from Bitwise on an ‘expedited basis’. The SEC had previously approved similar instruments from Hashdex and Franklin Templeton.

Tether, the issuer of the USDT stablecoin, reported a record net profit of $13bn for 2024. In the last quarter alone, profits totalled $6bn. The company’s investments in US Treasuries reached a record high of $113bn.

Trading volume on decentralised exchanges (DEX) reached a record $564.56bn in January, hitting highs since last September. In January, the share of Solana-based AMM exchange Raydium exceeded that of Uniswap, the once perennial leader of the segment.

The FxPro Analyst Team