Crypto market has been in freefall since midday Friday, losing $12.7 billion in value every hour over a 60-hour period, totaling $760 billion erased. Crypto news cycle saw a bearish turn of narrative amid a market overturn.
The dramatic sell-off was triggered by the U.S. President Donald Trump’s Feb. 3 announcement of tariffs on imports from China, Canada, and Mexico, which sent shockwaves through global risk assets.
Altcoins Take the Hardest Hit
The second-largest cryptocurrency, Ethereum (ETH), plummeted 16%, hitting a low of $2,368 at 2:11 am UTC before recovering slightly to $2,552. Despite the rebound, ETH remains 38% below its Dec. 17, 2024 peak of $4,078.
Other major altcoins suffered even steeper losses, with Avalanche (AVAX), XRP, Chainlink (LINK), and Dogecoin (DOGE) each dropping over 20% in the last 24 hours. The global crypto market cap fell 11.4% to $3.17 trillion, according to CoinGecko data.
Bitcoin (BTC), however, showed relative stability amid the chaos. While it fell 6.8% to $94,743 over 24 hours, it avoided the worst of the crash.
TradingView data reveals Bitcoin’s dominance—its share of the total crypto market—rose to 61% during the sell-off. This shift suggests investors are rotating into Bitcoin as a perceived safer asset during times of uncertainty.
The sharp decline in altcoins has been attributed to a combination of stop-loss triggers and a lack of retail investor participation. Trading volumes had been declining for weeks, signaling waning appetite and a lack of conviction among investors.
Markets were caught off guard by Trump’s tariffs, as attention had been focused on other developments, such as advancements in AI technology.
Crypto News of U.S. Tariffs Spark Mass Sell-Off Across All Assets
The sell-off was not isolated to crypto. Traditional markets also felt the impact, with Nasdaq 100 futures dropping 2.7% on Feb. 3 following the tariff announcement. Crypto news over the internet showed a switch in sentiment.
S&P 500 and Dow Jones Industrial Average futures fell 2% and 1.5%, respectively. The correlation between crypto and equities suggests that the market’s trajectory will depend heavily on the performance of U.S. stocks in the coming days.
Market sentiment took a significant hit, as reflected in the Crypto Fear & Greed Index. The index plunged 16 points to 44 out of 100 on Feb. 3, marking its lowest level since Oct. 11, 2023. This drop into “Fear” territory highlights the growing unease among investors as geopolitical risks escalate.
Bitcoin’s rising dominance, now at 61%, underscores a broader trend of risk aversion. The increase in dominance without a corresponding rise in the overall crypto market cap indicates that traders are abandoning altcoins in favor of Bitcoin. This shift is likely to continue until market conditions stabilize.
The road ahead remains uncertain. While Bitcoin’s resilience offers a temporary haven, the broader crypto market’s recovery hinges on stabilizing equities and resolving trade tensions. For altcoins, the outlook is particularly challenging, as they face prolonged pressure unless market sentiment improves significantly.
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