Market watchers are observing that major tokens in the cryptocurrency sphere are starting to show signs of bottoming out. This development comes as geopolitical tensions and tariff fears persistently cloud the near-term outlook for the crypto market.
As of Monday morning in Asia, Bitcoin (BTC) was hovering around $105,000. Although it experienced a slight change in price over the previous 24 hours, it has seen a decline of approximately 5% over the last week. Other cryptocurrencies, including Ether (ETH), XRP (XRP), Solana (SOL), Cardano (ADA), and Dogecoin (DOGE), displayed similar price movements in the same timeframe. These trends suggest that these tokens may have established a local bottom near their support levels, possibly indicating a rebound opportunity for intraday traders.
According to Nick Ruck, director at LVRG Research, “Bitcoin hovers around $105K as investors remain uncertain about short-term macroeconomic events.” He noted that uncertainty surrounding inflation, tariffs, and the overall state of the U.S. economy has slowed bullish momentum in the crypto market and has led some investors to withdraw capital from riskier assets.
Despite these uncertainties, Ruck remains optimistic about the long-term outlook for the cryptocurrency industry, citing the ongoing onboarding of more institutions and users into the market each day.
Trade tensions have continued to weigh heavily on risk sentiment, particularly after China’s announcement on Monday that the U.S. had implemented new discriminatory restrictions on AI chip exports and software sales. This situation has prompted China to declare its intent to defend its interests, leaving traders on high alert.
Jeff Mei, COO at BTSE, highlighted the rapid responsiveness of cryptocurrencies to even minor escalations in trade hostilities, stating, “Events over the last weekend showed just how quickly cryptocurrencies could react from even a slight escalation in trade war hostilities.” He emphasized the importance for traders to monitor announcements from both China and the U.S., as well as any developments related to the ongoing Russia-Ukraine situation and key U.S. economic data releases expected this week, including the U.S. trade deficit, unemployment numbers, and remarks from various Federal Reserve officials.
Mei further noted that while macro developments are currently driving most market movements, there is a positive trend in large institutions continuing to build their exposure to cryptocurrencies.
In the meantime, investors are diversifying into tokens like XRP and SOL, even as Bitcoin’s price trajectory becomes increasingly aligned with traditional risk assets. This diversification trend is viewed by some as a contribution to the long-term optimism surrounding the sector.
Kathy Qu, research manager at HashKey Cloud, indicated that “trade policy uncertainty drives capital into high-growth tech stocks, but savvy investors are also diversifying further into crypto, particularly TradFi-friendly assets like Bitcoin and XRP, where ETF optimism continues to grow.” She also pointed out that staking and decentralized finance (DeFi) remain bright spots in the market, with real-world asset tokens showing strong momentum. Additionally, Ethereum ETFs are expected to benefit from the SEC’s staking exemption, which is anticipated to encourage further institutional participation in the DeFi sector.
