The crypto market experienced a downturn on February 1 as President Donald Trump announced new import tariffs, causing Bitcoin’s price to plummet by 5%, which also negatively impacted altcoins.
Starting February 1, the U.S. will enforce tariffs of 25% on imports from Canada and Mexico and 10% on Chinese goods, escalating existing trade tensions.
In the 24 hours following this announcement, Bitcoin (BTC) faced a significant sell-off, dropping over 5% to a low around $91,200 before recovering slightly to approximately $94,000.
Despite this rebound, BTC remains approximately 13% below its all-time high of $109,000. Trading volume surged by over 200%, indicative of substantial market panic or selling pressure.
During the same timeframe, the global cryptocurrency market capitalization fell nearly 12%, settling at around $3.15 trillion.
Interestingly, following the inauguration of President Donald Trump on January 20, Bitcoin and other altcoins had previously seen considerable price increases, but the recent tariff policies have drastically altered market sentiment, leading to declines in asset values.
The impact of Bitcoin’s downturn has reverberated through the altcoin market, with Ethereum (ETH) dropping nearly 20%, Ripple (XRP) by 22%, Solana (SOL) by 8%, and Binance Coin (BNB) by over 15% in the past 24 hours.
Increased trading volume during this price drop indicates significant selling pressure, as traders offload their assets. This trend suggests that long-term investors are now selling Bitcoin at lower profits or even at a loss, as reflected in recent data.
This behavior is often a sign of capitulation among long-term holders, a common occurrence during bearish market conditions. Some experts have raised concerns about a potential “financial crisis” in light of these developments.
