Bitcoin, Ethereum, and XRP are experiencing turmoil as a reaction to recent policies and announcements from Trump. As of Wednesday, the overall cryptocurrency market capitalization has dropped to $2.784 trillion.
Bitcoin (BTC) has shown a correlation of 0.75 with the S&P 500 over the past 30 days, indicating that it is trading similarly to U.S. stocks. The influence of Trump’s ideals—what he perceives about any given issue on any particular day—has contributed to a significant downturn in crypto within the first fifty days of his presidency.
Why is crypto struggling while Trumpism prevails?
The U.S. stock market is experiencing a decline, with the S&P 500 down nearly 8% in the last month, falling below its level from the day Trump was elected in 2024. According to the index, $4.5 trillion in value has been erased from the market, with this downturn affecting more than just equities.
Cryptocurrencies, generally seen as high-volatility risk assets, are facing a marked decrease as traders adopt a risk-averse stance and withdraw their investments from this sector.
Despite the dismal performance of U.S. stocks, which rank among the worst recorded within the first 50 days of a new administration, the crypto market cap remains nearly 20% above its pre-election values, even following the recent sell-off.
When Bitcoin surged past the $100,000 mark and achieved a new all-time high, Ethereum and XRP also saw gains. However, the recent downturn has seen the top three cryptocurrencies decline by nearly 15%, 28%, and 9% over the past month, based on TradingView data.
Despite Trump’s executive orders and announcements in support of crypto, trader sentiment has not rallied positively. The Crypto Fear & Greed Index from Alternative.me indicates that anxiety persists amongst traders.
A recent analysis evaluated the impact of Trump’s return to the presidency on alternative investments, including digital assets. The analysis suggested that outcomes will depend on various factors such as “the nuances of policy execution, market expectations, and global economic conditions. While some sectors might benefit from deregulation or tax breaks, others could face reduced government backing or shifts in policy.”
With this in mind, traders must adapt their strategies, adjust their portfolios, and stay vigilant for headline news while considering potential changes, such as the integration of new tokens into the U.S. Strategic Crypto Reserve, to prioritize assets likely to benefit from favorable policy changes or demonstrate resilience to market volatility.
Crypto market crash, pre and post-election performance of Bitcoin, Ethereum, XRP
The cryptocurrency market and its leading tokens have continued their downward trajectory this week, following nearly four consecutive weeks of correction. As traders digest Trump’s tariff strategies and policy shifts, institutions and market actors have become increasingly cautious, leading to growing losses in Bitcoin.
Bitcoin now stands at a critical juncture; an easing of financial pressures could enable cryptocurrencies to rebound, as traders may seek to invest in risk assets again. However, the ongoing geopolitical challenges and Trump’s influences are exerting a heavy toll on the market.
Conversations online revolve around whether a Strategic Crypto Reserve would satisfy the expectations of the crypto community and what the implications of including Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA) would mean for token holders.
Traders are currently observing developments closely. Historical trends show that Bitcoin typically experiences a price drop of between 20% and 25% before it climbs back up in a bullish market. Nonetheless, the combination of macroeconomic pressures and increased market volatility complicates predicting Bitcoin’s price movements in the near and distant future.
The $80,000 mark remains a vital support level for Bitcoin; reclaiming the $100,000 milestone could propel BTC toward a new all-time high. Conversely, slipping below $80,000 could see the cryptocurrency dip to below $70,000, its pre-election value.
A further decline of 15% from current levels could eliminate all gains Bitcoin has made since the election.
Ethereum is currently trading 30% lower than its pre-election price, returning to levels observed in November 2023. Several factors, including a lack of institutional interest, uncertainties regarding Ethereum Foundation changes, and whale liquidation, have contributed to the downward trend in Ethereum’s price.
As of this writing, Ether is trading at $1,846, and traders are looking for a catalyst, such as SEC approval for staking in existing Ether ETFs in the U.S., that could boost the price of the largest altcoin.
XRP is showing the most resilience among the leading three cryptocurrencies, trading 75% higher than its pre-election levels, with a current price of $2.1668.
Factors such as the potential addition of the token to the U.S. Strategic Crypto Reserve, the participation of Ripple executives in recent high-profile crypto events, and the SEC’s evolving stance on litigation with crypto firms have contributed to the increase in XRP’s price.
Bitcoin, Ethereum, and XRP on-chain analysis
Traders holding Bitcoin and XRP have been taking profits consistently since mid-February. In contrast, Ethereum traders appear to be experiencing capitulation, as losses on their holdings have been realized, reflected in the negative trends of the Network realized profit/loss metric.
While capitulation often precedes price stabilization, it’s unclear whether Ether can recover soon.
Overall open interest in USD for these three tokens has been steadily declining since the end of February, indicating that derivatives traders are losing interest in these leading cryptocurrencies in line with the prevailing risk-off sentiment and the downturn in the U.S. stock market.
As Bitcoin increasingly resembles a U.S. tech stock, the narrative of “Bitcoin as a hedge and safe-haven asset” is faltering, with cryptocurrencies being categorized as risk assets within alternative investment spaces.
Is it the end of the Bitcoin bull run?
A crypto analyst known on social media as @davthewave posits that the worst of the market correction for cryptocurrencies is likely behind us. They believe the Bitcoin bull market is still very much alive, pointing to five key indicators that support this assertion.
Historically, during the last three bull runs, Bitcoin’s price experienced corrections averaging between 24% and 32%. The recent correction falls comfortably within this range and does not signal an end to the bull market.
The Crypto Bitcoin Bull Run Index, which analyzes nine different metrics to evaluate the current market cycle, indicates that Bitcoin has yet to cross significant thresholds that typically result in new all-time highs. This suggests that the bull market may still be in play, with the potential for Bitcoin to reach new peaks in the upcoming months of 2025.
Agne Linge, Head of Growth at WeFi, commented on the increasing market volatility in Bitcoin, attributing it to changing macroeconomic conditions.
Linge stated,
“Over the past two weeks, Bitcoin’s price has fluctuated between $79K and $85K, reflecting increased market volatility driven by growing geopolitical and macroeconomic factors. The market sentiment is tense, and trade tensions are heightening again, with new tariffs expected to be implemented on April 2nd. Recently announced tariffs on steel and aluminum imports have triggered quick reprisals from the European Union, which intends to impose countermeasures on goods valued at 26 billion euros (approximately £22 billion pounds) starting next month.
This increased macro volatility and geopolitical strains have pushed investors toward safe-haven assets like U.S. Treasuries, suggesting a broader shift towards capital preservation amid mounting market uncertainty. Furthermore, Germany’s decision to increase debt for military financing has led to substantial sell-offs in German government bonds (bunds), reinforcing the flight to U.S. Treasuries as investors seek more stability.”
Analysts from Bitfinex shared insights, remarking that,
“Such widespread capitulation often marks the phase before market stabilization, although continuing geopolitical and macroeconomic worries remain a significant concern.”
Dr. Sean Dawson, Head of Research at Derive.xyz, expressed his views, noting:
“The market is navigating substantial challenges as the macroeconomic landscape deteriorates, and cryptocurrencies are no exception.
As bearish sentiment escalates, traders are resorting to downside hedging strategies, especially amidst rising volatility across traditional financial markets and cryptocurrencies. The next few weeks will be pivotal in assessing how the broader economic climate impacts prices and trading behaviors in digital assets.”
Disclosure: This article is not intended as investment advice. The content on this page is for educational purposes only.