The crypto markets are experiencing significant downward pressure following the U.S. government's imposition of new tariffs, with Bitcoin (BTC) down 6.3% and Ethereum (ETH) down 21.9%. The tariffs, seen as a provocation that reignites trade tensions reminiscent of 2018, have led to a growing risk aversion in both cryptocurrency and traditional markets. Market analysts initially believed the downturn might be temporary; however, indications suggest it could persist longer as retaliatory measures from Canada, Mexico, and China may exacerbate the situation. Experts warn that the current environment reflects deeper concerns than previously perceived, as the actual trade deficit issues may keep pressures on risk assets for weeks. Numerous cryptocurrencies are seeing negative funding rates, leading to heightened short positions, particularly in ETH. Despite the current atmosphere, some niche tokens like Hyperliquid's HYPE have shown resilience, and activity within decentralized exchanges remains robust. With economic reports and institutional earnings in the coming days, market participants are advised to stay vigilant for further developments and potential market shifts.

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