Trump's Tariffs Spark 6% Crypto Sell-Off
2min read Trump’s sweeping trade policy triggered major outflows from crypto wallets as traders reacted to mounting uncertainty and falling prices. The cryptocurrency market has tumbled following President Donald Trump’s announcement of sweeping reciprocal tariffs on over 100 countries on April 2. Bitcoin and major altcoins have seen declines as traders reacted to the economic uncertainty spurred by the trade policy shift, reinforcing bearish conditions that had already been brewing.
Investors moved large amounts of BTC, ETH, and XRP into exchanges before and after Trump’s speech, signaling a strong intent to sell. Bitcoin dropped from an intraday high of $88,500 to around $83,000, a sharp retreat that reflected investor unease. Ethereum followed suit, declining nearly 6% to $1,820, while XRP fell 5% to trade near $2.00. The broader crypto market mirrored these losses, reinforcing bearish conditions that had already been brewing.
On-chain data from CryptoQuant revealed a notable increase in Bitcoin, Ethereum, and XRP deposits into exchanges before and after Trump’s speech, showing heightened selling pressure. Bitcoin transactions surged, with 2,500 BTC moved in a single block just hours after the announcement. Ethereum exchange inflows spiked to an hourly peak of 80,000 ETH, a sharp increase from previous days. XRP transfers into Binance surged to 130 million XRP in one hour, up from an average of 10 million per hour the previous day. The increase in exchange deposits indicates that investors were preparing to liquidate positions, likely in response to concerns over potential macroeconomic turbulence.
The derivatives market also reflected the bearish shift. Demand for Bitcoin and Ethereum declined as traders unwound long positions to secure profits. Bitcoin open interest dropped from 334,000 BTC to 304,000 BTC during Trump’s speech, suggesting traders were closing positions instead of doubling down. Ethereum open interest also saw a decline, falling by 100,000 ETH as traders exited their positions. Lower open interest in a declining market often signals long liquidations or profit-taking, reinforcing the downward momentum.
Ask Aime: How does the tumbled crypto market affect the US economy?
Bitcoin’s Bull Score Index, a key measure of market sentiment, fell to 20, marking its lowest reading since January 2023. Historically, a Bull Score below 40 for an extended period indicates sustained bearish conditions, similar to previous bear market phases. With macroeconomic uncertainty on the rise and investor sentiment at multi-month lows, the crypto market faces a challenging environment. Unless buying demand returns, Bitcoin and major altcoins may struggle to regain bullish momentum in the near term.
During his announcement, Trump declared, “We have to take care of the American people,” reinforcing his administration’s commitment to reducing trade imbalances and bolstering domestic production. However, analysts warn that the policy could provoke retaliation from trading partners, triggering a new round of trade disputes. The coming weeks will reveal whether Trump’s tariff gambit will succeed in reshoring jobs or whether it risks sparking inflationary pressures that could weigh on consumer spending and economic growth.
