Crypto discussions are heating up as political and economic shifts spark debates across social media. Investors are increasingly concerned about Donald Trump’s policies, particularly his proposed U.S. Crypto Strategic Reserve and new tariffs on Canada, Mexico, and China – both of which could increase volatility in crypto and stock markets.
The idea of a U.S. crypto reserve is facing skepticism. Many are unsure which assets – Bitcoin, Ethereum, XRP, Solana, or Cardano – would be included and whether the reserve would stabilize the market or give the government more control over crypto. This uncertainty is making traders nervous.
Will the market find its footing, or is more turbulence ahead?
The crypto market remains unstable, with Bitcoin dropping below $91,000 again and now hovering around $85,000. Despite growing institutional adoption and progress in regulations, short-term price action remains choppy, according to blockchain analytics firm Nansen.
Most Layer 1 projects have seen double-digit losses this year, except for XRP (+5.3%), which remains in positive territory. Meanwhile, Bitcoin (-7.87%), Toncoin (TON, -7.94%), and Celestia (TIA, -9.55%) have struggled.
Layer 2 (L2) solutions and AI tokens have taken the biggest hit. L2s are down over 40% YTD, while some AI-focused tokens have lost nearly 90% from their highs. The only tokens performing well in this downturn are Maker (MKR, +10%) and XRP (+5%).
Ethereum’s on-chain activity has slowed significantly, with median gas fees dropping to 1 GWEI—the lowest level in over a year. While Ethereum’s Layer 2 networks like Base remain active, overall market participation is declining.
The DeFi sector has also suffered, with projects like ENA and AERO down over 50% YTD. However, MakerDAO (MKR, +10.85%) has held strong, benefiting from USDS adoption.
Investors are divided on whether this is a bearish retest or the start of a market recovery. Bitcoin’s re-entry into its previous range suggests a possible rebound, but many tokens have lost their election-driven gains and may need time to recover.
With weak price action across most sectors, Nansen analysts remain neutral to bearish in the short term but optimistic long term. Many traders are shifting to stablecoin yield farming, waiting for a clearer trend before making big moves.
For now, Bitcoin is back in its previous range, and market sentiment is mixed. Some investors see this dip as a buying opportunity for BTC, SOL, and TIA, while others expect further downside. Until a stronger trend emerges, the crypto market remains in a wait-and-see phase.
Every cycle brings its challenges, but seasoned investors know that volatility is just part of the game.
Trump’s Crypto Strategic Reserve is a proposed government-held reserve of major cryptocurrencies like Bitcoin and Ethereum to boost U.S. crypto dominance.
New tariffs on Canada, Mexico, and China add market uncertainty, increasing crypto volatility as investors assess potential economic impacts.
Market sentiment is mixed. Some see current prices as a buying opportunity, while others expect further declines before a recovery.
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