Bitcoin rally short-lived as market dips amid Trump tariff hikes, recession fears

The “Trump rally” in the cryptocurrency market was short-lived, despite driving exchange activity since last weekend, as Bitcoin prices fell below $87,500—a level signaling a potential “bear market”—with a nearly 10% drop.

According to CoinMarketCap, the global cryptocurrency market, including Bitcoin, lost over 10% of its cap in 24 hours, dropping to $2.78 trillion.

Bitcoin saw a sharp decline of over 17% last month, marking its worst monthly percentage drop since June 2022. Ethereum also faced a significant downturn, dropping 14% to around $2,000—its lowest level since November 2023.

As of 8:15 a.m. on Tuesday, Bitcoin stands at $84,060.

The decline was triggered by the U.S. imposing additional tariffs on Canada, Mexico, and China, which strengthened the global trend of fleeing risky assets.

At the same time, growing recession concerns in the U.S. are putting additional pressure on crypto assets.

Last week, Bitcoin fell as low as $78,000 before rebounding on Sunday to test levels above $95,000, following remarks from former U.S. President Donald Trump regarding the creation of a “national cryptocurrency reserve.”

On Sunday, Trump declared in his Truth Social post, “I will make the U.S. the world’s crypto capital,” and announced that he had instructed the Presidential Working Group to advance plans for a strategic cryptocurrency reserve, which would include XRP, SOL, and ADA.

The next Bitcoin rally awaits concrete steps

Market analysts noted that Trump’s statements were not entirely new, echoing previous campaign promises. While some investors initially reacted positively, the market has since absorbed the news.

Analysts believe that if the U.S. implements a national cryptocurrency reserve, it could serve as a major catalyst for Bitcoin and other digital assets.

However, skepticism remains, as some analysts observed that optimism surrounding Trump’s crypto reserve plan has waned, with concerns persisting over its feasibility.

The funding for such a reserve could come from cryptocurrencies seized by law enforcement, meaning that rather than injecting new liquidity into the market, it would primarily involve asset transfers—limiting the potential impact on cryptocurrency prices.

Meanwhile, investors are now shifting their focus to the first-ever White House Crypto Summit, scheduled for Friday, March 7.