- The crypto market is down over 4% following President Trump’s announcement of reciprocal tariffs on over 180 countries.
- Bitcoin may continue to see high volatility in the near term due to rising correlation with macroeconomic factors.
- Glassnode report suggests that XRP demand has peaked, highlighting that its price is more susceptible to downside volatility.
Bitcoin (BTC) stretched its decline on Thursday, briefly dropping below $83,000 as President Trump’s newly announced reciprocal tariffs extended the crypto market downturn by over 4%. The sustained decline and high volatility highlight Bitcoin’s increasing risk to macroeconomic uncertainties.
“High volatility is likely to persist, as Trump receives feedback from the market,” said Tracy Jin, COO of crypto exchange MEXC in a statement to FXStreet.
Jin stated that Bitcoin could drop to around $76K – $78K by the end of April. However, a recovery could shift capital from gold into BTC and Bitcoin ETFs, potentially driving prices higher.
“A return to January’s values of $100K – $102K for Bitcoin can stimulate a transfer of capital from gold to Bitcoin and Bitcoin ETF, potentially pushing BTC further toward $118K – $120K,” Jin added.
BitMEX co-founder Arthur Hayes also commented on Bitcoin’s post-tariff decline, highlighting a potential for recovery.
“Market no likey “Liberation Day”, if BTC can hold $76.5K between now and US tax day April 15, then we are out of the woods,” Hayes wrote in a Wednesday’s X post.
Bitcoin holders’ losses increase while XRP faces further downside risks
Glassnode’s report suggests that Bitcoin is showing signs of a bear market, characterized by weakened price momentum and a decline in profitability.
Using the Relative Unrealized Loss, Glassnode revealed that while a significant number of Bitcoin holders are in loss, the scale of their unrealized losses remains moderate. This suggests that although losses are present, they are yet to hit levels that characterized the bear market in past cycles.
The report further highlights that the realized price for the supply in loss is approximately $96.7K, suggesting that coins trading below the level are carrying an unrealized loss of 12%. While this indicates rising bearish momentum, BTC’s price remains above the negative levels of previous cycles.
“Overall, there are many signs of weakness for Bitcoin investors. However, we should note that the magnitude of this weakness across several dimensions is not yet at the depth and severity of some of the more brutal downtrends Bitcoin has experienced in the past,” wrote Glassnode analysts.
In contrast to Bitcoin’s increased losses, XRP has gained preference among retail investors. The report reveals that XRP’s rally in recent months was explosive compared to Bitcoin’s steady price movement. This quick price growth can be traced to “retail-driven speculation,” as over 62% of XRP’s realized cap is attributed to addresses younger than six months old.
However, with XRP’s price far below January’s peak of $3.40, the remittance-based token could be highly susceptible to downside volatility as investors realize lesser profits and increased losses.
“Given the retail-dominated inflows and largely concentrated wealth in relatively new hands, this alludes to a condition where retail investor confidence in XRP may be slipping, and this may also be extended across the broader market,” added Glassnode analysts.
The analysts concluded that demand for XRP may have peaked, warning investors to tread cautiously until the market sees a healthy recovery.
