The crypto market is seeing a strong recovery after experiencing a sharp decline of nearly 12%, plunging almost $400 billion in a single day. Meanwhile, the world’s largest cryptocurrency by market cap Bitcoin, which had fallen close to $90,000, has now bounced back to over $101,000. Other altcoins like, Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) have all posted gains of 10% to 20%. So, what’s behind this sudden recovery?
Trump Pauses Tariff Plans
The crypto market recently dipped, partly because of U.S. President Donald Trump’s plan to impose high tariffs of 25% on Mexico and Canada, and 10% on China. This caused uncertainty, hurting global markets, including crypto.
However, things took a turn when Trump decided to pause these tariff plans temporarily. Mexico’s President Claudia Sheinbaum reached a deal with Trump to delay tariffs for one month. The agreement includes Mexico sending 10,000 National Guard troops to strengthen border security.
Sostuvimos una buena conversación con el presidente Trump con mucho respeto a nuestra relación y la soberanía; llegamos a una serie de acuerdos:
1.México reforzará la frontera norte con 10 mil elementos de la Guardia Nacional de forma inmediata, para evitar el tráfico de drogas…
— Claudia Sheinbaum Pardo (@Claudiashein) February 3, 2025
Similarly, Canadian Prime Minister Justin Trudeau announced that on a phone conversation with Trump, Canada proposed to enhance its border security with a $1.3 billion plan, including appointing a Fentanyl czar and increasing surveillance.
Trump confirmed these deals, saying talks with both countries will continue. This pause in tariffs calmed market fears, helping the crypto market recover.
Institutional Buying at Lows
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 and Other Altcoins See Strong Recovery
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.
Credit: Source link
