XRP Leads Market Gains, Bitcoin Nears $115K as Trump Tariffs Sour Bullish Crypto Mood
The cryptocurrency market began the week with a sense of stability, following significant sell-offs on Friday and Saturday. These sell-offs, the worst in months for spot ETF outflows, saw Bitcoin (BTC) ETFs experience nearly $1 billion in outflows, pushing BTC down to approximately $114,000 before a partial recovery. Ether (ETH) also suffered, with $152 million in outflows on Friday, ending a month-long inflow streak and impacting its recent rally.
This downturn coincided with President Trump’s announcement of new tariffs on Asian and European goods, negatively impacting global market sentiment and increasing risk aversion. Jeff Mei, COO at BTSE, attributed the dip to concerns about the tariffs and the Federal Reserve’s reluctance to cut interest rates. However, he noted opportunistic buying before the opening of US markets, suggesting the fear might be overblown.
This opportunistic buying is reflected in current trading. Bitcoin is holding near $114,500 in early Asian trading, while Ether is above $3,550, remaining within short-term support zones. Retail favorites XRP and Dogecoin saw gains of up to 5%, leading market increases. Cardano (ADA), BNB, and Solana (SOL) also saw rises exceeding 3%.
The presence of institutional investors is seen as mitigating volatility. Augustine Fan, Head of Insights at SignalPlus, highlights increased secondary liquidity due to professional desks, suggesting a less chaotic market unwinding compared to the pre-ETF era. However, Fan advises caution, recommending reduced risk exposure in anticipation of a potentially volatile September and year-end, citing the Fed’s actions and the economic impact of tariffs and inflation.
Despite the recovery, ETF buying remains subdued, keeping overall sentiment cautious. Bitcoin is still below the crucial $118,000 breakout level, and Ether needs to surpass $3,500 to avoid further selling pressure. The broader macroeconomic environment offers some support, with US equity futures rising after Friday’s weak jobs report increased expectations of a Fed policy shift. Asian markets recovered from initial losses, and Treasury yields increased slightly. Oil prices fell slightly following OPEC+ production increases, and the dollar weakened. The situation remains dynamic, with several factors influencing the market’s trajectory.
