Key Insights:
Crypto markets saw a large fall today triggered by Trump's new tariffs on Canada, Mexico, Argentina, and China, with possible escalations with India and the European Union.
Bitcoin saw a crash to $91k, Ethereum crashed to $2159, and altcoin markets bled up to 30% in many cases.
Crypto markets also saw a quick recovery.
Memecoins were the largest hit in the markets.
US-based cryptos saw the least drawdown, like XRP and SOL, with Ethereum being an exception.
Top crypto analyst Ali Martinez saw today's crash much before anyone. He had earlier predicted that the markets would see a major correction in the first quarter of 2025. His tweet on 25 Jan 2024 clearly indicated that a correction was due in the next 90 days.
Bull markets often experience corrections followed by large rallies, which ultimately pave the way for more rallies. This cycle of rally-correction-rally is believed to prevent a major collapse in cryptocurrencies.
The current market correction in the last 48 hours was the combined result of an expected consolidation. What made it more severe was the possibility of a US trade war with multiple countries, such as Canada, Mexico, and China, creating a supply chain disturbance.
This is also why cryptocurrencies native to the USA and those depending on US markets like XRP and SOL did not see a major correction. Cryptos like Ethereum, which were already experiencing FUD, saw a 30% crash.
Bitcoin crashed 9% from $99.8k to $91.2k and was among the fastest to recover. At press time, its price is around $95k, with a bias toward further recovery.
Bitcoin Price Trends in the Last 7 Days
CoinMarketCap
Bitcoin has now confirmed that its strongest support zone lies in the $95k to $96k range. Hence, a break below $95k is not expected unless the markets turn overall bearish.
ETFs, corporate investments, Bitcoin's position as the 7th largest global asset, and regulatory clarity are the factors supporting solid growth in Bitcoin.
Ethereum was the largest to fall among major altcoins because of ongoing FUD around its price. ETH has been in a bearish mode since late November 2024. Despite multiple attempts, its price was unable to cross the $3500 level this year.
Ethereum Price Trends in the Last 7 Days
CoinMarketCap
At present, Ethereum has seen one of its worst days since 2020. The current ETH/BTC ratio is 0.027, much lower than the historical average of 0.15. Though most experts believe ETH will have a rally of a lifetime this year, the price remains beaten down.
XRP was one of the least to fall in the current crash because of ongoing speculation of crypto reserves, its upcoming ETF, fundamental factors and a confirmed listing on the CME Futures exchange.
XRP Price Trend in the Last 7 Days
CoinMarketCap
The chart of XRP for the last 7 days shows that it has very strong support in the range of $2.1. Further, seeing the current recovery rate, we assume XRP would recover above $3 by the end of February 2025.
In the medium term, XRP is expected to cross $7, while long-term estimates show it could get above $30 by the end of this year.
Lately, XRP has also been dropped from the list of cases pursued by the SEC, showing the new chief, Mark Uyeda's reluctance to take the case further. Last year, XRP secured a huge win after courts imposed a minimal $125 million fine on Ripple and decided that XRP was not a security.
Solana remains the second strongest altcoin after XRP because of its central role in the memecoin markets. All memecoin trades, including the recently launched $TRUMP, yield a certain portion of their fees to Solana. This factor enables the SOL token to easily outmaneuver rough market corrections like the current one.
Solana Price Trend in the Last 7 Days
CoinMarketCap
Solana easily escaped the current bloodbath with a relatively lesser drawdown of less than 10%. At press time, Solana traded above $200, its current support.
In the next few days, we might see a recovery in Solana, taking it aboe $250, followed by $300. The current short-term estimates suggest a price of $1000 by mid-2025 and $4000 in the next couple of years.
Solana also has fundamental support from its upcoming ETF, its listing on CME Futures, and its possible inclusion in the US National Digital Assets Stockpile.
Memecoins Saw The Largest Drawdowns
CoinMarketCap
Among the biggest losers were the memecoins, with some of the seeing losses up to 45%.
Top memecoins were the least to suffer, with 20% losses each in the case of DOGE and SHIB. However, the newly launched $TRUMP and $PUDGY memecoins saw a crash of more than 40%.
Donald Trump's official memecoin $TRUMP saw a severe correction because of its skewed tokenomics. The memecoin saw much criticism due to 80% of the token supply being held by project owners. However, despite all the drama, it still commands a market cap of $3.5 billion and is the largest Solana-based memecoin.
US-based cryptocurrencies, primarily active in the USA, saw much lower correction rates. Solana and XRP, along with Bitcoin, are two of the top contenders for the US National Digital Assets Stockpile.
US-based Cryptos Saw Relatively Lesser Drawdowns
CoinMarketCap
Further, we can also assume that these US-based cryptocurrencies would get preferential approval if ETF issuers decide to bring their ETFs. Solana, XRP, and Dogecoin are already on the verge of getting their ETFs approved.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.