The Crypto Fear and Greed Index has fallen sharply to 25, a decrease of 19 points from the previous day, plunging the market into the “Extreme Fear” zone.
This significant decline comes on the heels of U.S. President Donald Trump’s April 2 announcement regarding new aggressive “Liberation Day” tariffs, which have disrupted both traditional and cryptocurrency markets. The policy outlines a baseline 10% tariff on imports, with even steeper rates for select countries.
China now faces a 54% tariff, combining a new 34% rate with an existing 20% duty. The European Union will incur a 20% tariff, while Vietnam (46%), Taiwan (32%), India (26%), and Japan (24%) will also experience increased rates.
In contrast, Canada and Mexico are currently exempt from the 10% baseline tariff and any additional reciprocal taxes. This 10% tariff will only take effect if Trump removes the existing 25% duties on these countries, which were initially implemented due to concerns about drug trafficking and crime.
Trump has also introduced a 25% tariff on all vehicles manufactured abroad, set to take effect at midnight on April 4. While investors reacted with skepticism, he asserted that this initiative would safeguard American industries and lead to lower consumer prices.
In the aftermath of Trump’s tariff announcement, U.S. stock markets experienced a steep decline, with Dow futures plummeting over 1,000 points and notable losses in the S&P 500 and Nasdaq. The cryptocurrency market followed suit, with the total crypto market cap contracting by 4% to $2.7 trillion, according to a crypto price tracker.
Bitcoin (BTC) initially surged to $88,500 as Trump began his speech but quickly retraced to $83,073, down 2% within the last 24 hours. Other leading cryptocurrencies also suffered losses, with Ethereum (ETH) declining by 4% to $1,816 and Solana (SOL) falling 5.2% to $119. This sell-off resulted in $514 million in liquidations over 24 hours, with $290 million attributed to long positions, based on data from Coinglass.
Arthur Hayes, co-founder of the BitMEX crypto exchange, remarked on X that while the market has reacted negatively to the “Liberation Day” tariffs, it would be in a better position if Bitcoin maintains levels above $76,500 until U.S. tax day on April 15. He cautioned investors against getting “chopped up.”