Donald Trump’s expanding tariff plan has resulted in yet another crypto crash, with altcoins faring much worse than Bitcoin.
The Bitcoin price formed a long downside wick to $91.2k, a key support level, and has bounced back to $95.5k since. However, traders are treating the relief rally to $95k as a dead-cat bounce, especially heading into the typically bearish NY market open.
The $2.3 billion liquidation marks the largest 24-hour wipeout in crypto history, surpassing both the COVID crash and the FTX collapse.
A growing number of experts are now wondering whether the crypto bull market is over.
Donald Trump’s Tariff-Led Crash Sparks Comparison To The 1930 Great Depression – Altcoins Crash
Donald Trump’s expanding tariff policies have resulted in a broader financial correction, leading to a crypto crash as well. Following the announcement of 25% tariffs on Canada and Mexico each and 10% additional tariffs on China, Trump’s eyes are now set on a trade war with the European Union.
Each of the aforementioned nations has promised retaliatory tariffs of their own, sparking fears of an uptick in inflation. Bloomberg analysts claim the tariffs could reduce the US GDP growth by 1.2% while adding 0.7% to the core PCE, creating a potential stagflation scenario.
Trump promised the “pain” would be worth the price, a poor choice of words considering it reminded crypto traders of Jerome Powell’s “there will be pain” comments.
Donald Trump’s tariffs are also drawing comparisons with the 1930 Smoot-Hawley tariff plan, which is said to have greatly exacerbated the impact of the 1929 great depression.
Am I the only one out there who knows that the Smoot-Hawley tariff was the principal trigger for the 1929 stock market crash and the Great Depression?
— Bruce Bartlett (@BruceBartlett) February 2, 2025
Is The Crypto Bull Run Over?
Calls of a cycle top has increased following Monday’s crypto crash. However, smart money investors are still watchful.
For instance, the Bitcoin price held the $91.2k level, a key support.
Chartered Market Technician Aksel Kibar points out that BTC’s current price action is typical of the consolidation phase that follows a broadening pattern breakout. This could signal new highs in the coming weeks, however, the thesis is invalidated if BTC closes below $91.2k.
If 91.2K holds the consolidation can end up very similar to what Edwards & Magee featured after the broadening pattern breakouts. https://t.co/0HEfKR0332 pic.twitter.com/2OXV2UVD63
— Aksel Kibar, CMT (@TechCharts) February 3, 2025
All eyes are now on Donald Trump’s meeting with Canada and Mexico officials on Monday. Trump could signal an end to the tariff wars, which would result in a broad-based bounce back in financial markets.
On the contrary, continued aggression from the US President could dry up global liquidity, creating a bearish backdrop for risk assets like Bitcoin.
Best Cryptos To Buy Now?
Sidelined investors looking to buy the dip need to exercise caution. Buying the dip without a change in the bearish market structure, a phenomenon called “knife catching”, typically only adds to the losses.
Instead, smart money investors are pivoting to low-cap investments and presale tokens, considering they show little correlation with the broader market outlook.
Just yesterday on Sunday, an early $ELON4AFD investor turned his $109 investment into $350,000.
$109 to over $350,000 $Elon4afdTrading bot: https://t.co/QYUjB0vpbU https://t.co/e9NnjfNkX5 pic.twitter.com/uMvb7RG6YR
— Kakashi (@kkashi_yt) February 2, 2025
Similarly, Wall Street Pepe (WEPE) continues to add nearly a million to its presale total daily and is extremely close to its $72 million hard cap.
The meme coin’s Pepe The Frog theme, a VIP group delivering market alpha to holders and staking rewards have impressed deep-pocketed whales.
Considering its presale performance, experts believe WEPE could be the next billion-dollar meme coin.
Similarly, Solaxy (SOLX) has caught the eye of whales and has raised over $17 million in its ICO.
Solaxy is still in the early stages of its presale and will launch likely after Trump’s trade wars have been resolved, which bodes well for its upside potential.
Being the first prominent Solana layer-2 solution, its roll-up architecture is expected to play a key role in addressing SOL’s network congestion issues.
Considering its lofty goals and low market cap, prominent buyers are calling SOLX the next 100x crypto.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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