The cryptocurrency market, including Bitcoin, Ethereum, and XRP, is experiencing significant turmoil following announcements and policies from Trump. As of Wednesday, the overall market capitalization of cryptocurrencies has fallen to $2.784 trillion.
Currently, Bitcoin (BTC) shows a correlation of 0.75 with the S&P 500 over the past 30 days, suggesting that Bitcoin is acting increasingly like traditional U.S. equities. The term “Trumpism” captures President Donald Trump’s fluctuating beliefs and policies, which have drastically influenced the cryptocurrency market during the first fifty days of his presidency.
Why is crypto faltering while Trumpism prevails?
The U.S. stock market is also struggling; the S&P 500 has dropped nearly 8% over the last month, falling below the level seen on the day Trump was re-elected in 2024. The index indicates that $4.5 trillion in market value has vanished, and this downturn extends beyond equities.
Typically regarded as a high-risk asset, crypto has suffered a sharp decline as investors become risk-averse and withdraw funds from this asset class.
Despite U.S. stocks recording one of the worst performances ever in the early days of a new administration, the crypto market capitalization remains nearly 20% above levels prior to the election, even following this recent downturn.
After Bitcoin surpassed the $100,000 mark, Ethereum and XRP also saw a rally. However, the overall market has experienced a downturn, with these top three cryptocurrencies seeing losses of approximately 15%, 28%, and 9% in the last month, based on data from TradingView.
Despite Trump’s pro-crypto executive orders and the announcement of a Strategic Crypto Reserve, positive sentiment among traders remains elusive. Alternative.me’s Crypto Fear & Greed Index shows that fear persists among traders on Wednesday.
A report from Forbes in February evaluated the potential impact of a Trump presidency on alternative investments, including digital assets. The publication noted that outcomes would depend on “details of policy implementation, market expectations, and global economic conditions. While certain sectors may gain from deregulation or tax benefits, others could see reduced governmental support or shifts in policies.”
As a result, traders must be agile, adapt their strategies, and switch up their portfolios in response to news cycles, anticipating changes like which tokens may be included in the U.S. Strategic Crypto Reserve to prioritize those likely to benefit or show resilience amid policy-related fluctuations.
Crypto market downturn: pre- and post-election performance of Bitcoin, Ethereum, and XRP
Following nearly four weeks of continuous corrections, the crypto market, along with its top three tokens, has continued to slump this week. As traders process the implications of Trump’s tariffs and executive orders, market participants have become risk-averse, with realized losses in Bitcoin increasing.
Bitcoin stands at a crucial juncture; financial easing might encourage gains in crypto as demand for risk assets rises. However, ongoing geopolitical uncertainties and Trumpism continue to burden the sector.
Discussions about the potential efficacy of a Strategic Crypto Reserve and the implications of including tokens like Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA) are ongoing across various social media platforms.
Traders are now poised to observe how narratives develop. Historically, Bitcoin prices have tended to decline by 20-25% before rebounding in a bull market; nonetheless, current geopolitical pressures and a greater number of market influencers make forecasting Bitcoin price movements in the near term challenging.
The $80,000 level is critical support for Bitcoin; reclaiming the $100,000 milestone could trigger a rally towards previous all-time highs. On the flip side, if Bitcoin drops below $80,000, it may fall to pre-election levels below $70,000.
A further 15% decrease from current levels could erase all Bitcoin’s gains post-election.
Ethereum’s price has dipped 30% from pre-election levels, returning to values last seen in November 2023. Several factors, including a lack of institutional interest, concerns regarding changes within the Ethereum Foundation, liquidation by whales who used stablecoins as collateral against their Ether holdings, and dwindling interest from large investors, have adversely affected the price of Ethereum.
As of this writing, Ether trades at $1,846, with traders eager for a catalyst, such as SEC approval for staking on existing Ether ETFs in the U.S., to spur growth in this largest altcoin.
Among the top three cryptocurrencies, XRP has demonstrated the most resilience, trading 75% above its pre-election prices. At the time of writing, XRP is valued at $2.1668.
Factors contributing to the increase in XRP’s price include its potential addition to the U.S. Strategic Crypto Reserve, Ripple executives’ participation in Trump’s prestigious Crypto Summit last Friday, and the SEC’s shifting position regarding litigation against crypto firms.
On-chain analysis of Bitcoin, Ethereum, and XRP
Both Bitcoin and XRP traders have regularly taken profits on their investments since mid-February. Conversely, Ethereum traders exhibit signs of capitulation, solidified by negative spikes in the Network realized profit/loss metric as recorded by Santiment.
Typically, capitulation is followed by price stabilization; however, it remains uncertain whether Ethereum prices will recover in the near future.
Since the last week of February, the total open interest in USD across these three tokens has been steadily declining. This trend suggests that derivatives traders are losing interest in the top three cryptocurrencies, reflecting the prevailing risk-off sentiment and the severe downturn in the U.S. stock market.
As Bitcoin increasingly mimics the behavior of U.S. tech stocks, the narrative of “Bitcoin as a hedge and safe haven” diminishes, leading to its classification as a high-risk asset alongside traditional investments.
Is this the conclusion of the Bitcoin bull run?
The crypto analyst known as @davthewave suggests that the worst of the recent correction in the crypto market may be behind us, asserting that Bitcoin’s bull run is far from over. This analyst offers five key points that bolster their argument.
Thinking we've seen the worst of this #btc multi-month correction:
1] Multi-year diagonal support coming through
2] 0.38 fib retracement repeat
3] 0.5 fib retracement and resistance come support
4] Time fib through to end of April
5] one year moving average coming through pic.twitter.com/85XcPoAczW— dave the wave🌊🌓 (@davthewave) March 10, 2025
Historically, Bitcoin’s average price corrections during its last three bull runs were between 24% and 32% in 2016-17, 2020-21, and 2023-24. Thus, the recent BTC correction fits well within that range and does not outright indicate the end of the bull market.
The Crypto Bitcoin bull run index evaluates nine different statistics to gauge the current market cycle’s stage. Indicators such as the PI Cycle, MVRV Z-Score, and Reserve Risk are utilized to discern whether the market is in a Bitcoin bull or bear phase.
In previous cycles, whenever the CBBI reached 90, Bitcoin subsequently achieved a new all-time high. This milestone has yet to occur in the current cycle, suggesting that the bull market may still be in motion and that BTC could reach a peak in the upcoming months of 2025.
Agne Linge, Head of Growth at WeFi, provided written insights to Crypto.news, addressing the surging volatility in Bitcoin attributed to shifting macroeconomic conditions.
Linge commented,
“Bitcoin has fluctuated between $79K and $85K over the past fortnight, reflecting increased market volatility driven by rising geopolitical and macroeconomic pressures. Investor sentiment is tense; trade tensions are escalating, with new tariffs expected to take effect on April 2nd. Today, new 25% tariffs on steel and aluminum imports were enacted, prompting swift responses from the European Union, which is set to impose counter-measures on goods valued at 26 billion euros (approximately £22 billion pounds) starting next month.
The current climate of heightened macro volatility and international tensions has steered investors toward safe-haven assets such as U.S. Treasuries, demonstrating a broader tendency towards capital preservation amid rising uncertainty. Additionally, Germany’s choice to raise debt for financing military expansion has resulted in a sharp selloff of German government bonds (bunds), reinforcing the trend of seeking relative certainty in U.S. Treasuries.”
Analysts from Bitfinex offered insights to Crypto.news, indicating that:
“Widespread capitulation often precedes market stability, although geopolitical and macroeconomic issues remain a substantial hindrance.”
Dr. Sean Dawson, Head of Research at Derive.xyz, also provided comments to Crypto.news:
“The market is encountering considerable obstacles as the macroeconomic climate deteriorates, and cryptocurrencies are not exempt from this trend.
As bearish sentiment gathers momentum, traders are increasingly opting for downside hedging practices, particularly as volatility intensifies across traditional and crypto markets. The upcoming weeks will be pivotal in evaluating how the overarching economic landscape affects the pricing and trading behavior of digital assets.”
Disclosure: This article does not constitute investment advice. The information and materials presented on this page are for educational purposes only.
