Crypto Enters Extreme Fear Zone as Global Trade Tensions and Policy Shifts Weigh on Prices

The market tumbled sharply on Monday, with BTC briefly slipping below $65,000, as traders reacted to a mix of U.S. trade policy shifts, geopolitical risks, and looming economic data. The sudden losses erased weekend gains and pushed the market deeper into extreme fear, currently at 5.

Total crypto market capitalization fell roughly 3–5% within a day, sliding toward the $2.2 trillion mark. The downturn coincided with rising geopolitical risks and sweeping tariff measures announced by U.S. President Donald Trump, which unsettled broader financial markets and reduced appetite for risk assets.

Trade Tensions and Macro Risks Drive Sell-Off

Market volatility intensified after the Supreme Court of the United States ruled that parts of earlier tariff programs exceeded presidential authority. Shortly after, Trump introduced new global tariffs of up to 15% under separate trade powers, raising concerns about slower global growth and persistent inflation.

Escalating tensions between the United States and Iran added another layer of uncertainty, pushing investors toward traditional safe-haven assets such as gold. Crypto assets, which had previously benefited from a “digital gold” narrative, instead behaved more like high-risk investments during the latest market stress.

Large-holder selling also contributed to downside pressure, with increased transfers from whale wallets to exchanges signaling potential liquidation activity. Analysts noted that thin liquidity and weak conviction among buyers amplified price swings.

Economic Data And Policy Decisions in Focus

Investors are now watching upcoming economic indicators closely. Consumer confidence data, jobless claims, and producer price inflation figures are expected to shape expectations around interest rates. Recent inflation readings above forecasts have reduced hopes for near-term monetary easing by the Federal Reserve.

Meanwhile, the central bank is scheduled to inject roughly $14.6 billion into financial markets, a move some analysts believe could provide temporary support for speculative assets, though not equivalent to full stimulus measures.

Technology earnings are also on the radar, particularly results from Nvidia, whose performance often influences sentiment across both tech equities and crypto markets.

Market data shows more than $460 million in leveraged positions were wiped out during the latest decline, with long traders accounting for the majority of losses. Institutional flows have weakened as well, with exchange-traded crypto funds recording notable outflows.

Additional supply pressure emerged after mining firm Bitdeer sold its entire weekly production, while public commentary from industry figures, including Michael Saylor, suggested long-term optimism remains despite short-term weakness.

The Crypto Fear and Greed Index has dropped into extreme fear territory, reflecting cautious positioning across the market. Until macroeconomic clarity improves, analysts expect volatility to remain elevated as traders weigh policy risks against longer-term adoption trends.

Cover image from ChatGPT, BTCUSD chart from Tradingview