The cryptocurrency market is making a strong recovery after a sharp decline. Just recently, it experienced a 12% drop, losing nearly $400 billion in a single day. However, Bitcoin, the world’s largest cryptocurrency by market cap, has bounced back from a low of $90,000 to over $101,000. Other altcoins like Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) have all seen gains between 10% and 20%.
So, what’s driving this massive U-turn?
The crypto market’s dip was partly caused by U.S. President Donald Trump’s announcement of new tariffs: 25% on Mexico and Canada, and 10% on China. This sparked uncertainty, shaking global markets, including the crypto space.
Things changed when Trump decided to temporarily pause his tariff plans. Mexico’s President Claudia Sheinbaum worked out a deal with Trump to delay the tariffs for a month. As part of the deal, Mexico agreed to send 10,000 National Guard troops to strengthen border security.
Meanwhile, Canadian Prime Minister Justin Trudeau spoke with Trump and proposed a $1.3 billion plan to improve border security. This plan includes appointing a Fentanyl czar and boosting surveillance. Trump confirmed both deals, stating that talks with both countries would continue.
This temporary delay in tariffs helped calm market fears and played a key role in the crypto market’s recovery.
As Bitcoin’s price dipped, institutional investors took the opportunity to buy at lower levels. According to CryptoQuant’s analyst Maartunn, the Coinbase Premium Gap—an indicator that tracks Bitcoin’s demand on Coinbase compared to other exchanges turned positive, reaching +103.6.
This suggests strong buying interest from institutional investors in the U.S.
Bitcoin has crossed the $102,000 mark after hitting a low of $90,000, while Ethereum recovered from $2,251 to $2,827. Meanwhile, the Crypto Fear & Greed Index also moved into neutral territory with a score of 45, showing improved market sentiment.
The crypto market proves once again that it can bounce back from even the toughest challenges.
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