During the European trading session on Tuesday, Bitcoin (BTC) was approaching the 85,000 mark, as traders primarily focused on the forthcoming impact of U.S. tariffs set to be announced on Wednesday.
Dogecoin (DOGE) and Cardano (ADA) experienced increases of over 7%, leading the modest gains among major cryptocurrencies, while ether (ETH), XRP, Solana’s SOL, and BNB Chain’s BNB each rose nearly 5%.
According to data, the overall market capitalization fell by 3%, with the widely referenced CoinDesk 20 index also seeing a 3% uptick in the past 24 hours.
These movements occur against a backdrop of a broader risk-off sentiment prevailing in the market, with U.S. stocks struggling — the S&P 500 recorded a 3% drop last week, marking its worst performance since September 2023, alongside a surge in safe-haven assets like gold, which reached new highs early on Tuesday.
Concerns surrounding the impending tariffs, along with a cascade of U.S. economic and labor reports from the past month, have cast a pall over crypto sentiment. Augustine Fan, head of insights at SignalPlus, attributed the current situation to the absence of fresh catalysts — particularly a lack of significant ETF inflows — leading to a market that is devoid of strong conviction as it wraps up a turbulent quarter, which notably ended with Bitcoin down 11% and the S&P 500 experiencing its largest decline since the second quarter of 2022.
On the futures side, speculative positions on Bitcoin through CME are currently at their most pessimistic levels in years, showcasing a dramatic shift from the earlier bullish environment seen in January, noted Fan.
“It’s essential to remember that positioning data merely reflects the current market conditions and doesn’t necessarily indicate a tradable opportunity,” Fan highlighted. “While the conditions for a sustained rally appear elusive right now, any bullish rebound is likely to be swift given the prevalent short positions.”
Nevertheless, signs of resilience are emerging among long-term holders. Recent data indicates that those holding onto assets for 3-6 months are enjoying increasing profits and are trading at their lowest levels since June 2021, suggesting a sense of conviction rather than panic selling.
Moreover, newer whales, or substantial investors who have entered the market in recent months, are also maintaining their positions instead of cashing out, thereby helping to stabilize Bitcoin’s price floor, as per the available data.
Meanwhile, Jupiter Zheng, a partner at HashKey Capital’s Liquid Fund and Research, remarked that they view the uncertainty surrounding tariffs and the influx of economic data as a short-term hurdle.
“The current dip reflects a risk-off sentiment,” Zheng mentioned in a Telegram message. “However, we maintain optimism for the long term, as more institutions embrace crypto and regulators worldwide introduce new policies to bolster adoption.”