US Tariffs Shake Crypto Market: XRP and Bitcoin Struggle Amid Trade War Fears and SEC Uncertainty
The cryptocurrency market is facing turbulence as rising US tariffs on key trading partners threaten to escalate tensions, with XRP and Bitcoin (BTC) showing signs of strain. The Trump administration’s announcement of 25% tariffs on Canada and Mexico, along with a 10% import duty on Chinese goods, sent shockwaves through global markets, including the volatile crypto sector.
Tariffs Impacting XRP and Bitcoin Prices
The immediate market response to these tariffs was swift and severe. XRP dropped from a January 31 high of $3.1341 to a low of $2.1809 by February 3, reflecting a loss of nearly 30%. The crypto world, already grappling with regulatory uncertainties, was further rattled by the announcement, with Bitcoin (BTC) also tumbling from $106,105 to a low of $91,282 in the same period. The trade war fears pushed investors away from riskier assets, creating selling pressure on both XRP and BTC.
XRP’s Roller Coaster Ride: SEC Appeal Still a Wild Card
Amidst the tariff news, XRP’s future remains inextricably linked to the ongoing SEC appeal. Although recent optimism has emerged with hopes of the SEC withdrawing its appeal in the Ripple case, the regulatory silence continues to weigh heavily on market sentiment. XRP’s price has fluctuated from a high of $3.3999 on January 16 to a February 2 low of $2.5783, underperforming the broader crypto market.
The SEC’s position on its appeal is crucial for XRP’s price trajectory. If the SEC drops its appeal, it could lead to a significant bullish rally, potentially pushing XRP above its all-time high of $3.5505. However, should the SEC proceed with the appeal, the digital asset could face further losses and might drop below the $1.50 mark.
Bitcoin’s Decline: Tariff Announcement and Fed Policies Hit Hard
Bitcoin, often seen as a safe haven within the crypto space, also faltered in response to the US tariff news. The $91,282 low marked a substantial decline from January 31, with investors reacting nervously to the broader trade war concerns. The market is now faced with the possibility of prolonged inflationary pressures if import prices continue to climb, leading to higher Fed interest rates, which could weaken demand for riskier assets.
A key issue weighing on Bitcoin’s performance is the balance between supply and demand. With the potential for outflows from BTC-spot ETFs and the US Bitcoin Reserve (SBR) proposal gaining traction in Washington, the market remains jittery. BTC’s price is sensitive to government actions and monetary policy, making the 2024 Bitcoin Act and Federal Reserve moves critical in shaping its future price trajectory.
Market Outlook: Tariffs, SEC Appeal, and BTC-SBR Developments in Focus
In the coming days, market participants will be closely monitoring several macroeconomic developments that could shape the future of XRP and Bitcoin. Key factors include the SEC’s decision on the Ripple appeal, the ongoing impact of US tariffs on global markets, and the potential creation of a US Bitcoin Reserve.
- US Tariffs: Continued trade tensions could lead to further selling pressure on risk assets like XRP and BTC, especially if they fuel inflationary fears.
- SEC’s Appeal: The uncertainty surrounding the SEC’s appeal of the Ripple case continues to keep XRP’s future in limbo. A potential withdrawal of the appeal could result in a major price surge for XRP.
- Bitcoin Act & Strategic Reserve: The US government’s approach to creating a Bitcoin reserve will have significant implications for institutional adoption and market sentiment.
With price fluctuations and market uncertainty dominating the scene, XRP and BTC investors should keep a close eye on these developments, as they will likely shape the crypto landscape in the coming months.
