After US President Donald Trump said that taxes on Canada and Mexico would go ahead as planned, the cryptocurrency market experienced uncertainty. Because of this move Bitcoin fell below $90,000 for the first time since November, which made investors nervous. The CEO of Binance, Richard Teng, has told the market that this is only a “tactical retreat, not a reversal.” Teng’s comments show how strong the crypto market is, as it has been through similar financial storms. He thinks the market will come back strongly because crypto assets have responded to economic changes in the past, just like regular markets, but they usually come back stronger.
Fear-driven market sentiment
The Crypto Fear & Greed Index dropped to 21 out of 100 after Trump announced the tariffs, showing “extreme fear” among buyers. The index was at 29 (Neutral) on February 24, which is a big drop.
The Nansen Risk Barometer also changed from “Neutral” to “Risk-off” mode after being in that state since mid-November. Analysts at Nansen think that the market wants to know more about Trump’s tariff policies and the growth of the US economy before investing in risky assets like Bitcoin and altcoins again.
But Michaël van de Poppe, head of MN Trading, thinks this panic could be a chance to buy because he says that the worst time for feeling bad often marks the start of a recovery.
Crypto Affected by Fed Caution
Teng says that the current market drop is mostly due to the US Federal Reserve’s less aggressive approach to lowering interest rates. When interest rates go down, standard assets like bonds and deposits become less appealing to investors, making higher yielding assets like crypto more appealing. Even though things are uncertain, there is still a lot of desire for crypto ETFs.
Crypto’s Fundamentals Remain Strong
Even though the market may feel down, basic signs of crypto’s strength are improving. Teng is still positive and says that institutional assets and crypto ETFs are the most important things for long-term growth.
Conclusion
Historical patterns show that crypto will return stronger than before as the market takes in economic changes. Investors shouldn’t fear this drop; instead, they should see it as a chance to make money. The market is still strong and stable at its core.
