Cryptocurrency market sentiment has plunged to “Extreme Fear” after former US President Donald Trump confirmed plans to impose a 25% tariff on imports from Canada and Mexico are still in the works.
The Crypto Fear & Greed Index, a gauge of market sentiment, dropped to 25 on February 25, reflecting extreme investor fear. The index had been neutral at 49 the day before, marking a significant decline in just 24 hours.
Cryptocurrency Markets Plunge
Bitcoin prices fell from around $105,000 to $92,900 in just a few days following Trump’s tariff announcement. More than $2.2 billion worth of Ether was also liquidated as traders worried about the potential for an escalating trade war, especially as Canada and Mexico announced retaliatory tariffs against the United States.
History shows that the cryptocurrency market has been under similar pressure when Trump announced new tariffs. On February 9, Bitcoin plunged when he announced a 25% tariff on imported aluminum and steel. Then, on February 13, the market continued to decline when Trump signed an executive order imposing comprehensive reciprocal tariffs.
Trump (right) speaks at a press conference with Macron (left) at the White House. Source: White House/Youtube
The last time the Crypto Fear & Greed Index hit “Extreme Fear” was on September 7, when Bitcoin fell to around $54,000 after losing 7% in the previous two days.
Global markets under pressure
Cryptocurrencies were not the only ones affected, but the US stock market was also affected. The S&P 500 has fallen 2.3% over the past five trading days, while the Nasdaq Composite has lost 4% over the same period.
Bitcoin is currently trading below $92,000, its lowest level since late November, while the total cryptocurrency market capitalization has fallen nearly 8%, from over $3.31 trillion to around $3.09 trillion.
With the tariff deadline looming, market sentiment could remain negative unless there are signs of a change from the U.S. government or other major economies.
