After the sharp declines on February 1 and 2, the crypto market plummeted on the morning of February 3. More than $ 2 billion was liquidated in just a few hours. Altcoins fell by more than 30% , with Bitcoin falling to $ 90,000 and Ethereum falling to $ 2,000 . Most meme coins fell to zero.
Analysts at the StarEx exchange found that the differentiation between Bitcoin, altcoins and meme coins has further intensified in the past month. Funds continue to flow out of altcoins, and meme coins are experiencing a liquidation outflow. This situation has rarely occurred in the past six months. It seems that large funds have already noticed the bear market in advance, so they left the market in advance. ETF funds and institutional funds continue to net buy BTC. In other words, the liquidity of altcoins and meme coins has been very poor in the past month.
The trigger was US President Trump's announcement over the weekend that he would impose a 25% tariff on imports from Mexico, Canada and other countries , involving an annual trade volume of approximately US$ 1.6 trillion .
This decision immediately triggered countermeasures from many countries. Canada announced retaliatory tariffs, while Mexico said it would study a tax plan on US imports. Global trade tensions suddenly escalated. US stock futures fell across the board: Dow Jones futures plunged nearly 500 points, and S&P 500 futures fell 1.7% . Asia-Pacific markets collectively plunged at the opening on Monday . Japan's Nikkei 225 index opened 2.3% lower , and the Topix index fell 1.75% ; South Korea's Composite Stock Price Index fell 2.32% , and market panic quickly spread to the world.
Compared with the decline in the stock market, the plunge in the cryptocurrency market can be described as tragic. Today, the hunting of long funds was more about taking advantage of the news. The sudden flash crash of the market caused more than US$ 2 billion in funds to be liquidated.
The market expects that the tariff policy will push up energy transportation costs. At the same time, geopolitical risks may affect supply . The market will pass part of the costs on to consumers , which means that prices of many commodities may rise, thereby pushing up overall inflation . Inflationary pressure will force the Federal Reserve to maintain high interest rates and the US dollar index will jump.
The cryptocurrency market is relatively sensitive to the interest rate policy of the Federal Reserve . On August 5, the panic over the yen rate hike caused the market to plummet. However, the yen rate hike has already taken place, and there is no obvious negative factor that continues to suppress the market. Analysts at the StarEx exchange believe that this plunge is more of a panicked stampede of leveraged funds caused by the withdrawal of altcoin liquidity, and the market's "gold pit" is a bargain hunting opportunity.
Strategically, we can focus on the rebound opportunities of Sui , XRP , Aave , Ondo , which are backed by capital, and Sol , Ray , JUP , which are hot and conceptual . Analysts at the Star Ex exchange believe that the market may be similar to the sharp drop on August 5 , and will experience a bottoming trend in January and February . The oscillating strategy of buying low and selling high is more appropriate in this time window.
