Bitcoin experienced a 4% decline over the past 24 hours, following reports about impending U.S. tariffs on major trading partners. The announcements from President Trump have been sufficiently dramatic to keep crypto traders on edge, with Bitcoin and alternative coins responding to the developments.
Earlier this week, Bitcoin (BTC) managed to recover as traders felt optimistic following indications that Trump would pursue more targeted tariffs than previously proposed. Trump spoke with Canadian Prime Minister Mark Carney on Friday morning, and initial feedback seems promising.
The President described the phone call as “very, very good,” adding that “I believe things will work out nicely.” Meanwhile, Carney’s office reported that both parties agreed to start “comprehensive negotiations.”
As uncertainty lingers over whether Trump will impose additional tariffs on Canada, China, and Mexico on April 2, traders should brace themselves for more volatility and price fluctuations in Bitcoin and alternative coins.
Among alternative coins, Dogecoin (DOGE) and XRP managed to maintain their positions despite the significant price drops of Bitcoin and the tariff discussions.
Crypto sectors affected by Trump’s tariff strategy
Bitcoin has seen setbacks following nearly every significant tariff announcement made by Trump. However, alternative coins have suffered even more pronounced losses, with their combined market capitalization dropping 4% over the day and 23% year-to-date.
The total market value of cryptocurrencies, excluding Bitcoin, has plummeted almost 36% from its peak of $1.65 trillion on December 7, 2024.
The hardest-hit categories include meme coins, Solana-based tokens, AI agents, and AI launchpad tokens. Blue-chip meme coins, like Dogecoin, have retained gains from 2024, while XRP has shown resilience after the SEC reached a $50 million settlement concerning its lawsuit.
Even with ongoing uncertainty from the Trump administration’s tariff announcements and executive orders, traders of DOGE and XRP have consistently taken profits throughout Q1 2025.
Bitcoin, Dogecoin, and XRP stand as top crypto leaders
Despite the tariff announcements, Bitcoin has held steady, bouncing back from four flash crashes that wiped out between 20% and 30% of its value during this market cycle. Analysts and Bitcoin holders are confident that the leading cryptocurrency has reached its cycle bottom below $77,000, which marks a multi-month low.
As Bitcoin trades around $84,000 this Friday, there’s a noticeable uptick in institutional demand and inflows into U.S.-based ETFs. Institutional investors on Wall Street appear eager to add Bitcoin to their balance sheets.
Following a similar trend, Dogecoin, the largest meme coin, and XRP, the second-largest altcoin, have both responded positively. DOGE has increased by 41% over the past six months, while XRP has surged nearly 260% during the same period.
Dogecoin may test resistance levels between $0.20404 and $0.21465. If there’s a correction, support may be found approximately 10% lower around $0.16054, the upper edge of a bullish fair-valued gap.
Technical indicators, such as the RSI and MACD on the daily timeframe, suggest potential recovery for Dogecoin. The meme coin could bounce back from the 5% drop it saw on Friday and revisit resistance levels in the upcoming week.
While both altcoins have seen their values decrease on Friday and throughout the past week, long-term holders of Bitcoin, Dogecoin, and XRP have had opportunities to secure profits from their earlier acquisitions during this market cycle.
However, XRP’s chart indicates potential for ongoing declines. The MACD is reflecting red histogram bars above the neutral line, while the RSI is hovering at 42 and trending downward, indicating negative momentum.
Nevertheless, XRP retains its six-month gains, largely thanks to the resolution of the SEC lawsuit and a 60% reduction in the suggested settlement, marking partial victories for Ripple.
If XRP’s price falls further, it could test support around $1.9575 (down 11%), yet a surge could bring it to $2.5900, representing an 18% increase from current levels.
Tariff strategy increases pressure on leading altcoins and meme coins
Tensions in U.S. trade relations have heightened alongside tariff announcements from the President. Major altcoins like Cardano (ADA), Solana (SOL), and Chainlink (LINK) are among those that have suffered most, especially within the top 30 ranked by market capitalization.
Currently, although many altcoins trade 60% to 90% below their all-time highs, Dogecoin and XRP continue to hold onto double-digit gains from six months past. Ethereum (ETH) is notably one of the worst-hit altcoins, despite its classification as a commodity and its inclusion in the U.S. crypto pool.
The crypto Fear & Greed Index indicates that trader sentiment remains fearful, though slightly improved compared to last week and the previous month, currently standing at 44 on a scale of 0 to 100, as depicted in the chart below.
Memecoins generally exhibit heightened volatility and tendencies toward speculative behavior during fluctuations in price and periods of uncertainty. While they present opportunities for higher rewards and risks for traders, external factors like macroeconomic developments, tariff announcements, and geopolitical tensions have historically led to negative effects on the sector, erasing profits and prompting capital outflows as traders adopt risk-averse strategies.
A crypto analyst and Bitcoin supporter suggests that fears surrounding tariffs could yield a substantial bear trap, indicating more challenges for altcoin holders before any signs of recovery appear.
Market sentiment plays a critical role in the recovery of altcoins, as meme coins and low-market-cap tokens typically see greater retail participation compared to institutional investments.
Strategies for traders ahead of tariff announcements
With Liberation Day (April 2) approaching rapidly, crypto traders are bracing for a potential slowdown in activity. Bitcoin may aim to test resistance around the $88,000 mark, which served as support recently. A more conciliatory stance from the U.S. Federal Reserve and indications that Trump could take a “benign” approach to tariffs might bolster trader sentiment, as per a recent research report.
Amid a streak of positive ETF net flows into Bitcoin and a steady decline in Ethereum, it’s reasonable to conclude that alternative coins may be most adversely affected following impactful announcements. Overall, the derivatives market remains subdued, with low leverage and muted yields.
Crypto traders are advised to adopt a risk-off strategy rather than increasing their derivatives positions as Liberation Day approaches, which analysts suggest will significantly influence market volatility as traders react to tariff announcements and the ensuing response from global markets.
Ethereum suffers major setbacks due to its key role in DeFi
Despite being the largest altcoin, Ethereum has faced criticisms over the course of this market cycle, with some analysts labeling it as “dead” or a “zombie token.” Considering that Ethereum functions as the backbone for the entire DeFi ecosystem, encompassing Layer 2 and Layer 3 protocols, Ether feels the impact more acutely than many other altcoins.
According to an expert, Ethereum has undergone the most substantial sell-offs during bearish phases in the crypto market since DeFi relies heavily on automated trading practices. This reliance likely exacerbates leverage-related declines in ETH prices, fueling significant sell-offs, profit-taking, and loss realizations by major players in the field.
The liquidation of positions held by heavily leveraged institutional investors can heavily influence Ether’s value, leading to pronounced downturns for the altcoin in such situations.
This content is not intended as investment advice. The material presented here is for educational purposes only.