25.02.2025 13:50
The cryptocurrency market experienced a sharp decline following U.S. President Donald Trump's announcement of a 25% additional tax on Canada and Mexico. As the critical $90,000 support level for Bitcoin was lost, the total market capitalization decreased by 7.48%, falling to $2.91 trillion. The Fear and Greed Index dropped from 40 to 29 in a single day, causing panic among investors.
The turmoil in the crypto market is deepening due to the effects of global economic policies and widespread liquidations. The latest wave of volatility has left investors in shock, with double-digit losses experienced in major altcoins such as Ethereum, Solana, and XRP. The reasons behind the sharp selling wave in the market and the possible scenarios that may follow have become a topic of curiosity.
The Fear Index in Cryptocurrency Markets is Sounding the Alarm
Cryptocurrency markets are currently under significant pressure due to the effects of global economic policies. The main catalyst for this decline was U.S. President Donald Trump's announcement of a 25% additional tax on imports from Canada and Mexico. Trump emphasized during his meeting with French President Emmanuel Macron on February 24 that he would not back down from the tax plan despite rising economic concerns.
This development has impacted not only the crypto market but all financial markets. The S&P 500 lost 2.3% and the Nasdaq Composite lost 4% in the last five trading days. Investors' tendency to avoid risk led to over $900 million in liquidations in the crypto world within a few hours.
While Bitcoin (BTC) dominance rose to 61.39%, its market value dropped to $1.77 trillion. Ethereum (ETH) fell by 10.37% to $2,410, Solana (SOL) lost 12.6%, and XRP decreased by 10.67%.
Analyst Capo stated that if Ethereum cannot maintain the critical support level of $2,381, it could decline to the range of $1,800 to $2,100. For Bitcoin, the $85,000 level is considered critical support.
There are also promising developments. The Strategy company purchased 20,356 BTC for approximately $1.99 billion. The firm now holds a total of 499,096 BTC with an investment of $33.1 billion. Similarly, Japanese investment giant Metaplanet acquired an additional 135 Bitcoins worth $12.9 million. The company is steadily progressing towards its goal of 10,000 Bitcoins by the end of 2025. Similar moves by other institutional players could enable Bitcoin to regain strength.
Experienced analysts believe that the current correction could be a necessary cleansing before a new wave of upward movement. If institutional interest increases and the market absorbs the selling pressure, signs of a reversal may be seen in the near future.