Following President Trump's announcement of new tariffs on China, altcoin liquidity has significantly decreased, with the top ten altcoins and Ethereum (ETH) seeing drops of 12% and 8% respectively. This decline indicates that investors are adopting a more cautious approach amidst increasing market tension as China has promised to retaliate against the tariffs. The connection between traditional markets and cryptocurrencies appears to be tightening again, with crypto showing some correlation to the S&P 500 as the market reacts to the ongoing trade war concerns. Despite the general unease within equities, sentiment in the crypto space remains somewhat bullish, with investors continuing to assess the evolving market conditions. Recognizing these circumstances, Kaiko Research emphasizes that market participants are currently sidelining capital as they navigate through these precarious developments.

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