Bitcoin and most altcoins crashed on Tuesday morning, continuing a trend that has been going on in the past few months. BTC crashed to $91,000 for the first time since February 3rd and 15% below its highest level this year.
Other altcoins were also in the red. Pepe coin, the third-biggest meme coin crashed to $0.0000080, down by almost 70% from its highet point this year. XRP fell to $⅔, while Shiba Inu, Dogecoin, and Popcat tokens crashed. Recently launched Pi Network also retreated So, why did Bitcoin and other altcoin prices crash?
Donald Trump tariffs and inflation
The first main reason why Bitcoin and altcoins like XRP, Pepe, Shiba Inu, DOGE, and Pi coin prices crashed is the rising fear about tariffs in the United States.
Trump has pledged to impose major tariffs on key products and goods from key countries. The 25% Canada and Mexico tariffs that were paused earlier this month, will take effect on Saturday unless a deal is reached.
Trump will also impose a 25% tariff on steel and aluminum. He is also considering adding tariffs on European Union goods. And on top of this, he will impose reciprocal tariffs on other countries, a move that he hopes will lower the trade surplus.
Trump also hopes that these tariffs will help to pay for his tax cuts. His belief is that foreign countries will be the ones to pay for these tariffs.
The risk is that these tariffs will lead to high inflation and stagflation, conditions that are typically not friendly to risky assets like Bitcoin and altcoins,
XRP, SHIB, and altcoins crashed as the Fear and greed index fell
Bitcoin and other altcoins like Pepe, XRP, Pi Network, Shiba Inu, and Dogecoin prices have also crashed as a sense of fear spreads in the market. The fear and greed index has moved from the extreme greed area of 90 in 2024 to the fear zone of 38 today.
Historically, cryptocurrency prices crash when investors are fearful. This happens as many of them panic sell as they prevent further losses. Additionally, crypto investors typically remain in the sidelines when there is a sense of fear in the market.
NVIDIA earnings ahead
Additionally, Bitcoin and top altcoins like Pi Network, Pepe, Shiba Inu and DOGE are crashing as investors anticipate the latest NVIDIA earnings scheduled on Wednesday. These results are usually watched closely because the compay has become the second-biggest globally. It has also become the posterchild of the artificial intelligence craze.
Therefore, there is a fear that the company will publish weak financial results, a move that would lead to a crash of stocks and cryptocurrencies. Indeed, the NVIDIA stock price crashed by over 3% on Monday ahead of these earnings.
On the positive side, strong results and guidance will lead to a crypto and stock market surge later this week.
Buy the rumours, sell the news
Finally, Bitcoin and altcoins are plunging as investors sell the news. As you recall, these assets surged ahead of Donald Trump’s swearing in. This price action happened as investors anticipated his friendly policies.
The crypto market is now selling the news after his swearing in. This is a common situation where investors buy an asset ahead of a major event and sell it when the report happens,
There are other reasons why these assets are crashing. For example, investors are still reeling from the latest Bybit hack that cost the company over $1.4 billion. They are also plunging as they go through the distribution phase of the Wyckoff Theory.
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