Crypto traders blame Trump’s tariffs in search of ‘singular event’
Crypto traders have attributed the recent downturn in the market to US President Donald Trump's announcement of a 100% tariff on China, a common behavior among retail investors who seek singular events to explain market declines, according to the sentiment platform Santiment. The report noted a surge in discussions related to the tariffs among crypto market participants following the decline, which saw Bitcoin drop more than 10% within 24 hours. While geopolitical factors played a role in this market shift, Santiment also pointed to excessive leverage and risk within the crypto space as significant contributing factors. The ratio of long to short positions was heavily skewed, with $16.7 billion in long positions liquidated compared to only $2.5 billion in shorts. Looking ahead, developments in US-China relations could greatly influence trader sentiment. Positive negotiations might improve sentiment towards crypto, while increased tensions could lead to predictions of Bitcoin dropping below $100,000, showcasing its increased correlation with risk assets during geopolitical tensions. The Crypto Fear & Greed Index dropped significantly, indicating heightened market fear following the price decline.
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