Bitcoin, Ethereum, Dogecoin Crash On Trump's Tariff 'Liberation Day' — Analyst Says Buying BTC Between These Levels Could Lead To 'Substantial Gains'

The cryptocurrency market has been on a rollercoaster ride, with Bitcoin, Ethereum, and Dogecoin all experiencing significant price drops following Donald Trump's recent tariff announcements. The market sentiment has shifted dramatically, with investors pulling out of these digital assets due to heightened economic uncertainty and risk aversion. Let's dive into the details and explore what this means for investors.

Bitcoin's Plunge

Bitcoin, the king of cryptocurrencies, has seen its price drop to around $80,000 per bitcoin overnight before rebounding slightly. Fresh fears have emerged that Bitcoin could be headed to around $70,000, which could lead to "violent" market conditions. This drop is partly due to the tariff announcements, which have increased economic uncertainty and risk aversion among investors.



The tariffs have led to a risk-off sentiment, causing investors to pull out of Bitcoin, viewing it as a risky asset class. This is evident from the statement, "Many investors are pulling out of bitcoin, viewing it as a risky asset class for the first time since Trump took the White House." The options market has also played a significant role in heightened volatility in BTC price. Analysts from the bitfinex Alpha report explained that "Options realised volatility surged above 80 percent, signaling heightened instability as traders reacted to shifting macroeconomic conditions. Implied volatility jumped 35.7 percent just ahead of the summit, as traders hedged positions." This volatility has led to widespread capitulation among traders, which often precedes market stabilization.

Ethereum's Crash

Ethereum's price crashed by over 6% on Friday, continuing a downtrend that started on March 24 when it peaked at $2,105. The price dropped to a low of $1,880, its lowest level since March 18. This crash is directly linked to the release of hot inflation data, which points to higher interest rates for longer, exacerbated by Trump's tariff announcements. The fear and greed index dropped to 25 ahead of Trump’s tariffs, indicating heightened fear among investors. This fear has led to a sell-off in Ethereum and other risky assets, as seen in the statement, "Ethereum price also crashed as the fear and greed index dropped to 25 ahead of Trump’s tariffs."

The outlook for spot ETH ETFs has worsened, with net outflows of over $403 million this month, the worst performance ever. This has led to a sharp decline in Ethereum's price to a low of $1,800. The ongoing bleeding of ETH ETFs is a big divergence from what happened with spot Bitcoin ETFs, which have experienced two consecutive weeks of inflows. This indicates a lack of interest in Ether among institutional investors.

Dogecoin's Decline

Dogecoin's price took a sharp downturn following Elon Musk's clarification that the Department of Government Efficiency (D.O.G.E.) is unrelated to the meme coin. This clarification dashed hopes of increased adoption and utility for Dogecoin, leading to a 15.7% decline over the past seven days. The market sentiment for Dogecoin has soured, with the price trading at $0.168. The clarification by Musk effectively shut down rumors that the department might boost Dogecoin adoption, leading to a decline in investor enthusiasm.

What Does This Mean for Investors?

The recent tariff announcements by Donald Trump have had a significant impact on the short-term and long-term price volatility of Bitcoin, Ethereum, and Dogecoin. Investors should be prepared for increased volatility and potential price declines, and consider diversifying their portfolios to mitigate risks.



For Bitcoin, investors may consider it as a hedging asset against economic uncertainty. The statement, "Bitcoin may possess hedging properties against economic uncertainty; therefore, it may be beneficial for investors to consider this cryptocurrency as an investment when economic uncertainty is high," suggests that Bitcoin could be a viable investment option during times of economic turmoil.

For Ethereum, investors may need to diversify their portfolios away from Ethereum, given its loss of market share and the ongoing bleeding of ETH ETFs. The statement, "Ethereum continues to lose market share in key industries like decentralized finance, non-fungible tokens, and decentralized exchanges," highlights the need for diversification.

For Dogecoin, investors should exercise caution when investing in Dogecoin, given its lack of real-world utility and the bearish market sentiment. The statement, "The lack of real-world utility and the clarification by Musk could lead to further long-term price declines," suggests that Dogecoin may not be a viable long-term investment.

In conclusion, the recent tariff announcements by Donald Trump have had a significant impact on the short-term and long-term price volatility of Bitcoin, Ethereum, and Dogecoin. Investors should be prepared for increased volatility and potential price declines, and consider diversifying their portfolios to mitigate risks.

Ask Aime: What does the recent tariff announcement mean for Bitcoin, Ethereum, and Dogecoin?