• Crypto markets are feeling the heat: Trade tensions and recession fears are causing wild swings and sharp sell-offs.
• Bitcoin took a tumble, briefly dipping below $81K and bringing its market capitalization down to $2.71T.

The roller coaster continues for the crypto market, as it’s once again experiencing a significant sell-off. The culprit? Growing anxieties about a potential recession combined with escalating trade friction between the United States and Canada.

Market jitters intensified after President Donald Trump doubled down on his aggressive economic strategies, including sticking with tariffs on crucial trading partners.

While recession worries weren’t directly addressed by Trump in a recent interview, he stood firm on his policies, arguing they are designed to revitalize the economy, even if the path gets bumpy.

Mark Carney replaces Justin Trudeau

Across the border, Canada’s political scene witnessed a major shakeup as Mark Carney stepped in to replace Justin Trudeau as prime minister. Carney wasted no time in signaling a tough stance against Trump’s trade tactics.

In his inaugural address as PM, Carney declared,

“America is not Canada. And Canada never, ever, will be part of America in any way, shape or form.”

He further asserted, 

“My government will keep our tariffs on until the Americans show us respect.” 

This bold statement comes as Canada already has 25% tariffs in place on US consumer goods, a retaliatory measure against Trump’s own tariffs. 

Canada vs. America trade war deepens

Adding his perspective to the escalating situation, David Krayden, writer for Post Millennial and Substack, posted on X, observing, 

“25% tariff on imports to Canada MORE inflation, this is NOT a good idea. It will TRIGGER the 25% Reciprocal tariff from Trump and USA so it is really stupid.  It makes Canada the aggressor and it is what is causing the inflation and triggering the USA tariff. Because the USA tariff is NOT on Canada RIGHT now.”  

In a follow-up, he warned starkly, 

“This is heading to a depression if politicians do not normalize relations.”

Bitcoin crash hits hard

Turning our attention back to the volatile crypto landscape, Carney’s election seemed to amplify market jitters. Bitcoin [BTC] experienced a sharp drop, briefly falling below $81,000 before bouncing back above $82,000.

Altcoins followed suit, with major players like Ethereum [ETH], Ripple [XRP], and Dogecoin [DOGE] all plummeting by over 6%. Smaller-cap cryptocurrencies, such as Injective and Maker, endured even steeper double-digit percentage losses.

The overall crypto market capitalization also took a significant hit, shrinking by 6% to $2.8 trillion. This volatility triggered leveraged liquidations exceeding $600 million, with a staggering $530 million wiped out from long positions.

Despite attempts at market recovery, recent data indicates a further 3.37% decline, pushing the global crypto market cap down to $2.71 trillion. This persistent downward trend underscores the ongoing uncertainty and prevailing bearish sentiment in the crypto space.