Donald Trump’s movements to impose prices on the main American trade partners have sparked a sale of cryptocurrencies, with a smaller chip index on the right track for the steepest rout of two days in almost three years.
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Posted on February 02, 2025 • Last update 10 hours ago • 3 -minute playback
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(Bloomberg) – Donald Trump’s movements to impose prices on the main American trade partners have sparked a sale of cryptocurrencies, with a smaller chip index on the right track for the steepest rout of two days in near Three years.
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The small capitalization index MVE Cryptocompare fell up to 21% on Monday, adding to the 11% drop in the day before. Ether, the second largest cryptocurrency, briefly plunged up to 27% before undergoing losses. Bitcoin resisted better and negotiated at around 2% at around $ 95,145 at 8:51 a.m. in New York.
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The severity of Ether’s dive took the merchants off guard, many of whom had taken long positions in anticipation of a recovery against Bitcoin forced to relax these bets while the market turned against them, triggering a wave of liquidations.
“It’s a story as old as time. A shock macro launched a decrease in the market, which forced the liquidation of lever -effect positions, “said Matthew Hougan, director of investments in Bitwise. “Ethereum was particularly affected because there were significant liquidations in the DEFI space specifically, and the ETH is the native currency of DEFI.”
The stock markets across North America, Asia and Europe also dropped after Trump threatened the European Union with prices, which would add to the samples already imposed in Canada, Mexico and China.
The deep crypto decreases, underlines how Trump, the most pro-Crypto American president, added an element of uncertainty for traders. After joining the Trump election in early November, almost all the best digital tokens are now highly decreased for the year.
“Trump’s pricing war has an impact on the entire market,” said Caroline Bowler, Managing Director of BTC Markets. “The concerns about commercial wars and stagflation, triggering recessions, are cascade through altcoins and bitcoin.”
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The two -day decrease in MVE Cryptocomple of two days was the stiff since May 2022, when the implosion of the Stablecoin Terrausd swirled the cryptographic markets, the data compiled by Bloomberg show.
Cryptographic markets have increased the movements that Trump has since inaugurated to support the industry. The Republican signed a decree on January 24 which created a working group which should provide clear rules for American cryptography companies in the six months. The group is also responsible for examining the creation of a stock of cryptography.
Despite the optimism as to Trump’s plans, its pricing ads during the weekend “saw a strong offer for the drop in Saturday and Sunday while the hedges on the biggest macro-ramifications ramifications,” said Sean McNulty, head of APAC derivatives of Falconx for digital-active prime. For the moment, Bitcoin does the sale better than smaller and more speculative tokens, he added.
In the derivative markets, more than $ 2.2 billion in upward crypto posts were liquidated over a period of 24 hours, Coinglass said in a post X on Monday, describing it as “the biggest cryptography accident”.
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“The risk of an prolonged trade war with China, in addition to the American allies, does not increase well for the space of volatile digital assets and depending on the rates,” said Sean Dawson, head of research on the Cryptographic trading platform drift.xyz. He added that Ether could find support at $ 1,900 to $ 2,000, the options of options “giving 25% ETH chances reach $ 2,000 before the end of the month.”
Ether was down around 12% at around $ 2,600 Monday morning in New York.
“Panic quickly emerged,” said Vetle Lunde, research manager at K33 Research. “With the sale of the sale, initially on the cash market, before the situation amounted to derivatives with long massive liquidations.”
The total value of the crypto market slipped by around $ 360 billion on Monday, according to Coingecko data, while Memecoins has been launched in recent weeks by Trump and his wife Melania have also been taken in the sale, exchanging approximately 75% and 90% below their respective peaks.
—Ade the help of Olga Kharif and David Pan.
(Updates with small capitalization performances in the second paragraph.)
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