By Omkar Godbole (All times ET unless indicated otherwise)
Crypto markets are a sea of red alongside a growing risk aversion in traditional markets, and Trump’s tariffs are to blame. Late Friday, the president imposed a 25% tariff on imports from Canada and Mexico and 10% on China, provoking retaliatory measures that have reignited a trade war reminiscent of 2018.
The consensus on social media and among the analyst community is that this tariff-induced slide in the crypto market is temporary and that bitcoin (BTC) will quickly rebound. However, there are reasons to believe otherwise.
Firstly, Trump has shattered the crypto market’s belief that he is looking to pump markets and would use small tariffs merely as a negotiating tactic. In fact, he has threatened to increase tariffs if trading partners retaliate. Since Canada and Mexico responded with their own measures, the potential for further tariff hikes looms large.
Geo Chen, a macro trader and author of the popular Substack-based newsletter, Fidenza Macroshared his perspective in an email to subscribers: “My view is that they will remain in place for several months with the risk of increasing, as Canada has pledged to retaliate and China has initiated a lawsuit against the U.S. in the World Trade Organization. These responses could escalate the situation. The best we can hope for is a partial rollback of tariffs once negotiations conclude.”
Chen emphasized that the tariffs are driven by trade deficit concerns rather than the fentanyl crisis, as Trump likes to portray, adding that markets may take days or weeks to grasp this, leading to persistent volatility. Besides, the latest tariffs are on $1.3 trillion worth of goods that the U.S. imports from the three nations, which is seven times bigger in value than the first shot fired in 2018.
All this makes the latest episode appear more destabilizing than back then, when the S&P 500 initially dropped 9% from its peak in March before quickly rebounding. In other words, the potential pain may be greater this time around, which poses a challenge for risk-on assets like BTC.
As one crypto trader choosing to stay anonymous said: “Despite the talk of deals, this move doesn’t feel temporary.” Stay alert!
What to Watch
Crypto:MacroFeb. 3, 9:45 a.m.: S&P Global releases January’s U.S. Manufacturing PMI Final report.Feb. 3, 10:00 a.m.: The Institute for Supply Management (ISM) releases January’s Manufacturing PMI Report on Business.Feb. 4, 10:00 a.m.: The U.S. Bureau of Labor Statistics (BLS) releases December’s Job Openings and Labor Turnover Survey (JOLTS) report.Job Openings Est. 7.88M vs. Prev. 8.098MJob Quits Prev. 3.065MFeb. 5, 9:45 a.m.: S&P Global releases January’s US Services PMI (Final) report.Feb. 5, 10:00 a.m.: The Institute for Supply Management (ISM) releases January’s Services ISM Report on Business.Services PMI Est. 54.3 vs. Prev. 54.1Services Business Activity Prev. 58.2Services Employment Prev. 51.4Services New Orders Prev. 54.2Services Prices Prev. 64.4EarningsFeb. 5: MicroStrategy (MSTR), post-market, $0.09Feb. 10: Canaan (CAN), pre-marketFeb. 11: HIVE Digital Technologies (HIVE), post-marketFeb. 11: Exodus Movement (EXOD), post-market, $0.14 (2 ests.)Feb. 12: Hut 8 (HUT), Pre-market, C $ 0.01Feb. 12 (TBA): Metaplanet (Tyo: 3350) Feb. 12: Reddit (Red), post-marketFeb. 13: CleanSpark (CLSK), $-0.05Feb. 13: Coinbase Global (COIN), post-market, $1.61Feb. 18: CoinShares International Ltd (Sto: cs), pre-marketFeb. 18: Semler Scientific (Dump), post-market, $0.26 (1 est.)Feb. 20: Block (XYZ), post-market, $0.88Feb. 26: MARA Holdings (MARA), $-0.15Feb. 26 (TBA): Sol Strategies (CSE: He was going)Feb. 27: Riot Platforms (RIOT), $-0.18March 4: Cipher Mining (CIFR), $-0.09March 6 (TBA): Bitfarms (Bitf)March 17 (TBA): Bit Digital (BTBT)March 18 (TBA): TeraWulf (WULF)March 27 (TBA): Bitdeer Technologies Group (BTDR)March 28 (TBA): DeFi Technologies (Neo: Defi)March 31 (TBA): Galaxy Digital Holdings (TSE: Glxy)April 11 (TBC): KULR Technology Group (Gold)April 22: Tesla (TSLA), post-market
Token Events
Governance votes & callsCompound DAO is discussing the creation of Morpho-powered lending vaults on Polygon curated by Gauntlet. Polygon Labs is set to offer $1.5 million in POL, matched with $1.5 million in COMP to incentivize usage.Arbitrum DAO is voting on whether to transfer 1,885 ETH in Nova transaction fees to its Treasury through the modernized fee collection infrastructure outlined in the ova Fee Router Proposal. Aave DAO is nearing the end of a vote on deploying Aave v3 on Sonic, a new layer-1 Ethereum Virtual Machine (EVM) blockchain with a high transaction throughput.Feb. 4, 1 p.m.: TRON DAO and CryptoQuant to host a network review diving into performance, adoption and key metrics.Feb. 4, 12 p.m.: Stellar to host its Q4 quarterly review.UnlocksFeb. 5: XDC Network (XDC) to unlock 5.36% of circulating supply worth $75.9 million.Feb. 9: Movement (MOVE) to unlock 2.17% of circulating supply worth $30.06 million.Feb. 10: Aptos (APT) to unlock 1.97% of circulating supply worth $64.92 million.Token LaunchesFeb. 4: Vine (VINE), Bio Protocol (BIO), Swarms (SWARMS), and Sonic SVM (SONIC) to be listed on Kraken.
Conferences:
Token Talk
By Shaurya Malwa
Hyperliquid’s HYPE is holding strong in the market bloodbath, with a 5% jump in the past 24 hours.The decentralized exchange generated nearly $4 million in fees over the past 24 hours, and part of the revenue is being used to buy back HYPE, helping support its price amidst a bearish market.Elsewhere, prices of long-forgotten Jeo Boden (BODEN), a parody token mimicking Joe Biden that was worth $1 billion by market capitalization at peak, rose as much as 300% in the past 24 hours.It registered trading volumes of over $8 million, the highest since July 2024, for no immediately apparent reason, which swiftly shifted prices of the once-behemoth token that now has a tiny $3.5 million capitalization.
Derivatives Positioning
Major altcoins like ETH, XRP, BNB, SOL, DOGE, ADA are seeing negative perpetual funding rates, a sign of dominance of short positions. OM and HYPE tokens stand out with flat open interest-adjusted cumulative volume delta, pointing to a neutral flow. Other tokens exhibit negative CVD, which imply net selling. BTC, ETH short-dated options show a bias for puts, with ETH reflecting greater downside fears relative to BTC. Block flows featured a large short position in the BTC $120K call expiring on March 28 and a bear put spread in ETH $2.8K and $2.5K strikes.
Market Movements:
BTC is down 6.3% from 4 p.m. ET Friday at $95,631.55 (24hrs: -3.25%)ETH is down 21.9% at $3,734.92 (24hrs: -15.28%)CoinDesk 20 is down 15.9% at 3,154.76 (24hrs: -10.32%)CESR Composite Staking Rate is up 3 bps at 3.03%BTC funding rate is at 0.0036% (3.97% annualized) on BinanceDXY is up 0.95% at 109.41Gold is unchanged at $2,801.09/ozSilver is down 0.31% at $31.28/ozNikkei 225 closed -2.66% to 38,520.09Hang Seng closed unchanged at 20,217.26FTSE is down 1.17% at 8,572.04Euro Stoxx 50 is down 0.4% at 5,203.52DJIA closed on Friday -0.75% to 44,544.66S&P 500 closed -0.5% to 6,040.53Nasdaq closed +0.83% at 19,480.91S&P/TSX Composite Index closed -1.07% to 25,533.10S&P 40 Latin America closed -0.73% to 2,370.49U.S. 10-year Treasury was unchanged at 4.54%E-mini S&P 500 futures are down 1.38%% at 5,983.50E-mini Nasdaq-100 futures are down 1.59% at 21,247.00E-mini Dow Jones Industrial Average Index futures are down 1.23% at 44,149
Bitcoin Stats:
BTC Dominance: 61.62 (1.35%)Ethereum to bitcoin ratio: 0.02725 (-7.22%)Hashrate (seven-day moving average): 833 EH/sHashprice (spot): $55.93Total Fees: 4.56 BTC / $435,584CME Futures Open Interest: 177,260 BTCBTC priced in gold: 33.9 ozBTC vs gold market cap: 9.65%
Technical Analysis
BTC’s daily chart. (TradingView/CoinDesk)
BTC has bounced from the double top support line at $91,384, trimming losses. The series of red candles, however, suggests the path of of least resistance is on the lower side for now. A close (UTC midnight) under the support line would trigger a double top bearish reversal pattern, opening doors to a potential drop to $75,000.
Crypto Equities
MicroStrategy (MSTR): closed on Friday at $334.79 (-1.56%), down 5.37% at $316.81 in pre-market.Coinbase Global (COIN): closed at $291.33 (-3.31%), down 5.69% at $274.74 in pre-market.Galaxy Digital Holdings (GLXY): closed at C$28.48 (-2.90%)MARA Holdings (MARA): closed at $18.34 (-4.38%), down 5.34% at $17.36 in pre-market.Riot Platforms (RIOT): closed at $11.88 (-0.17%), down 4.21% at $11.40 in pre-market.Core Scientific (CORZ): closed at $12.27 (+0.08%), down 6.68% at $11.45 in pre-market.CleanSpark (CLSK): closed at $10.44 (-4.83%), down 5.08% at $9.91 in pre-market.CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $22.55 (+0.22%), down 6.34% at $21.12 in pre-market.Semler Scientific (SMLR): closed at $51.96 (-0.36%), down 6.08% at $48.80 in pre-market.Exodus Movement (EXOD): closed at $49.88 (-18.74%), up 2.25% at $51 in pre-market.
ETF Flows
Spot BTC ETFs:
Daily net flow: $318.6 millionCumulative net flows: $40.50 billionTotal BTC holdings ~ 1.172 million.
Spot ETH ETFs
Daily net flow: $27.8 millionCumulative net flows: $2.76 billionTotal ETH holdings ~ 3.634 million.
Source: Farside Investors
Overnight Flows
Chart of the Day
Chains ranked by past 24 hours’ net bridged inflows by absolute value in USD. (Artemis)
Ethereum has seen the highest amount of net inflows through crypto bridges in the past 24 hours, while the usual leaders Base, Solana, Arbitrum have seen most outflows. That’s a classic risk-off investor behavior, where the move to the oldest and biggest smart contract blockchain, anticipating deeper market swoon.
While You Were Sleeping
XRP, Dogecoin Plunge 25% as Crypto Liquidations Cross $2.2B on Tariffs Led Dump (CoinDesk): On Sunday, major cryptocurrencies including XRP, DOGE, and ADA slumped as U.S. tariffs on Canada and Mexico announced on Saturday fueled trade war fears and $2.2 billion in futures liquidations.Chance of Bitcoin Tanking to $75K Doubles as Trump’s Tariffs Ignite Trade War, Derive’s Onchain Options Market Shows (CoinDesk): Derive.xyz’s on-chain options now indicate a 22% chance bitcoin will drop to $75K by March 28 — double last week’s odds.USDe Stable Despite Trade War Volatility (CoinDesk): Ethena’s synthetic stablecoin USDe maintained its $1 peg amid volatile crypto markets, likely aided by its yield-generating mechanism.Dollar Soars, Stocks Fall as Trump Imposes Tariffs: Markets Wrap (Bloomberg): The tariffs announced Saturday propelled the dollar to a two-year high as global stocks, U.S. equity futures, and crypto prices plunged amid mounting fears of rising inflation and economic disruption.Beijing Prepares Its Opening Bid to Talk Trade With Trump (The Wall Street Journal): China will reportedly contest Trump’s 10% tariffs via the WTO and resume trade talks to revive the Phase One deal by pledging increased U.S. purchases and investments.Bank of England Expected to Cut Interest Rates Again as U.K. Economy Stagnates (Financial Times): With stagnant growth and easing inflation, the Bank of England is expected to cut rates by 0.25% this week, though rising energy costs and trade tensions may trigger stagflationary pressures.
In the Ether
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