Crypto sentiment drops to lowest level in six months
Traders brace for volatility after Trump’s tariff news
The cryptocurrency market has entered a state of “Extreme Fear” after U.S. President Donald Trump confirmed that his 25% tariffs on Canada and Mexico would proceed as scheduled.
The announcement triggered a sharp decline in cryptocurrency prices, with Bitcoin (BTC) and Ether (ETH) experiencing significant sell-offs, according to Cointelegraph.
Crypto Sentiment takes a sharp dive
The Crypto Fear & Greed Index, a widely used sentiment tracker that measures market confidence on a scale from 0 to 100, plunged to 25 points on February 25, signaling Extreme Fear among investors. Just a day earlier, the index stood at 49 (Neutral).
Crypto Fear & Greed Index. Source: Alternative
The drop in sentiment coincided with Trump’s statement at a press conference on February 24, where he appeared alongside French President Emmanuel Macron. Trump reaffirmed that tariffs on imports from Canada and Mexico would take effect as scheduled after a 30-day postponement.
Bitcoin and Ethereum plunge sharply
Following Trump’s confirmation, Bitcoin (BTC) fell below $92,000, while Ethereum (ETH) dropped under $2,500. Bitcoin’s decline to a multi-week low sparked a $950 million liquidation wave across cryptocurrency exchanges.
BTC price dynamics. Source: CoinGecko
The initial tariff announcement on February 1 had already raised concerns in financial markets. Bitcoin was trading around $105,000 before plummeting to $92,000 amid fears of an imminent trade war. The uncertainty pushed investors to offload riskier assets, leading to a widespread downturn in the cryptocurrency market.
With Canada and Mexico promising retaliatory measures, investors are bracing for further market volatility. The latest developments have revived inflation fears, which could impact monetary policies and investor confidence in digital assets.
Crypto market loses over $220 billion
The broader cryptocurrency market has also seen a sharp decline. Within just 24 hours, the total market capitalization dropped nearly 8%, falling from $3.31 trillion to approximately $3.09 trillion.
Market analysts point to rising economic tensions as the primary driver of the sell-off. With Trump’s tariffs set to resume next month, traders are becoming increasingly cautious about the short-term stability of the market.
The last time the Crypto Fear & Greed Index fell to Extreme Fear (25 or lower) was on September 7, indicating that investors are now at their most cautious level in the past six months.
Market outlook: What’s next?
As the cryptocurrency market faces new economic uncertainty, investors are closely monitoring Trump’s next policy decisions and the potential counter-tariffs from Canada and Mexico.
While some analysts see buying opportunities at these lower price levels, many warn that volatility may persist until there is more clarity on the trade situation.
For now, the crypto market remains tense, with traders preparing for potentially deeper corrections amid growing global economic uncertainty.
