Bitcoin and other cryptos fell on Monday as investors reacted to renewed trade tensions and a sharp decline in technology stocks, fueling broader risk-off sentiment across markets.
The world’s largest crypto dropped 5% to $91,000 by late afternoon in the U.S., its lowest level since February 3, while Ethereum slid 11% to $2,500, CoinGecko data shows.
The decline in crypto comes as U.S. equities weakened, with the Nasdaq Composite shedding more than 1% amid concerns over artificial intelligence demand and upcoming earnings from chipmaker Nvidia.
Investor sentiment also took a hit after U.S. President Donald Trump confirmed tariffs on Canadian and Mexican imports would move forward as planned, reigniting concerns over inflation and economic growth.
“Tariffs pay for the tax cuts. To me, there’s not much new here,” Joe McCann, founder of crypto-focused investment firm Asymmetric, told Decrypt. “This type of headline risk will continue this year.”
McCann argues that the Trump administration’s use of tariff revenue will help offset the fiscal impact of extending tax cuts and limit the addition of trillions to the national debt over the next decade.
The S&P 500 fell for a third straight session, while the Dow Jones Industrial Average eked out a small gain.
Dismissing concerns over Trump’s tariffs, Marco Lim, managing director at Solowin Holdings and founding partner of MaiCapital, told Decrypt the market rout is driven more by a “risk-off mood” following the Bybit hack, which saw over $1.4 billion in ETH and stETH withdrawn from its hot wallet on Friday.
“Bitcoin has been stuck in this range for a while, and I believe most of the good news in crypto is already priced in. It should test $90,000,” Lim said.
The Federal Reserve’s next move remains a key focus for investors, with expectations for rate cuts later this year still in flux.
U.S. Treasury yields edged lower on Monday as markets reassessed inflation risks, but uncertainty over monetary policy and geopolitical developments kept traders on edge.
Other analysts Decrypt spoke to said the renewed tariff uncertainty, combined with tech-sector weakness, will continue to weigh on risk assets, including crypto. However, they aren’t the largest headwinds on investor’s radars.
“Tariffs are somewhat inflationary, but they have a greater impact on slowing growth,” Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt.
“Ending the war in Ukraine would be more deflationary than tariffs would be inflationary. The market seems to need more time to decide,” he said.
Investors were also wary of Nvidia’s upcoming earnings report on Wednesday, with concerns mounting over demand for its AI chips following the emergence of lower-cost alternatives from China.
Bitcoin, which often trades in line with risk-sensitive technology stocks, extended losses as Nasdaq’s decline deepened.
More than $686 million in crypto-leveraged positions were liquidated over the past 24 hours, according to data from Coinglass, suggesting forced selling contributed to the downturn.
While forced liquidations exacerbated the selloff, some analysts believe the washout could improve market structure by reducing excess leverage.
“The big liquidation we just had meant a lot of leveraged positions are flushed out, implying more resilience on the downside,” Peter Chung, head of research at Singapore-based algorithmic crypto trading firm Presto, told Decrypt.
Chung pointed to a Bitcoin-specific catalyst in the form of the President’s Working Group on Financial Markets’ regulatory review, which required agencies to identify existing crypto-related regulations by last week’s deadline.
With the regulatory review process now complete, Chung expects forthcoming details to shape market sentiment, potentially offering a tailwind for Bitcoin.
“If I had to bet, I think Bitcoin will outperform other risk assets in the near term,” Chung said.
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