XRP and dogecoin (DOGE) experienced significant declines, dropping over 10%, as Asian markets reacted to the news of fresh U.S. tariffs on China. This added to the already turbulent week for cryptocurrencies. Bitcoin (BTC) also suffered a 7% drop, falling to nearly $79,000, its lowest point since November. Since reaching its peak of over $108,000 in January, BTC has declined by almost 30%. Other cryptocurrencies such as Ether (ETH), Cardano’s ADA, and BNB Chain’s BNB also faced similar losses, sliding by at least 9%.
The overall market capitalization of cryptocurrencies fell by 8% to $2.7 trillion, erasing all the gains made since the election of U.S. President Donald Trump in November. The CoinDesk 20 (CD20), a broad-based index, also experienced a drop of nearly 9%.
Despite positive earnings from Nvidia, global equities faltered due to renewed tariff concerns, a slowing economy, and overstretched positioning. This market gloom has spilled over to the crypto market, as BTC has a high correlation with the S&P 500 index.
According to Augustine Fan, head of insights at SignalPlus, ex-BTC tokens and trading sentiment have struggled this year due to liquidity depletion from memecoin runs. BTC has also been affected by ETF selling, which reached a record high last week.
The losses in the crypto market on Friday mirrored the decline in Chinese stocks following Trump’s announcement of a new 10% tariff on Chinese imports. This has raised concerns about an escalating trade war between the U.S. and China, the two largest economies in the world.
The new tariff adds to the existing 10% tax on Chinese goods that began earlier this month. This could negatively impact China’s economy, which is already facing a property crisis and falling prices. It may also hinder the stock market’s rise, which has been fueled by China’s advancements in AI, led by ChatGPT rival DeepSeek.
The timing of this tariff announcement is significant, as China’s National People’s Congress, its big annual meeting, is set to begin next week. During this event, leaders are expected to share economic plans and growth goals. Any decision by China to stimulate the economy through increased spending or buying could have an impact on bitcoin and crypto prices, serving as a market catalyst.
However, some bitcoin traders remain bearish until the National People’s Congress meeting concludes. Volatility has decreased, and bullish option speculators are shifting towards puts instead of calls. Additionally, concerns over MSTR (-10%) are adding to the bearish sentiment, as their convertible funded buying poses a risk to BTC.
Overall, the crypto market is facing a challenging period due to various factors, including trade tensions and market sentiment. Traders and investors will closely monitor upcoming events and economic decisions for potential market movements.
