Dogecoin, XRP Drop 7% as Trump’s Tariff Threats Shake Markets; Bitcoin Options Expiry Looms
Major cryptocurrencies, including Dogecoin (DOGE), Ether (ETH), and XRP (XRP), fell sharply on Thursday as market sentiment weakened following U.S. President Donald Trump’s warning of potential new tariffs on Canada and the European Union. Meanwhile, investors are bracing for the upcoming expiry of Bitcoin (BTC) options worth over $12.2 billion, which could add further volatility to the crypto markets.
Key Highlights:
- Dogecoin, Ether, and XRP plunged over 5% in early Asian trading, while Toncoin (TON) bucked the trend with a 5% gain.
- Over $12.2 billion worth of Bitcoin options are set to expire, with a max pain point of $85,000.
- Market sentiment remains cautious ahead of the U.S. Personal Consumption Expenditures (PCE) data release, a key inflation metric that may impact Federal Reserve interest rate decisions.
- Growing concerns over a trade war and global economic instability may reduce capital inflows into Bitcoin as a hedge against economic uncertainty.
Crypto Market Reacts to Tariff Concerns
The cryptocurrency market experienced a broad downturn, with the CoinDesk 20 (CD20) index showing an average decline of 4.5%, led by Dogecoin’s 7% drop. The downward movement follows a relief rally earlier in the week, as traders took profits ahead of key economic data releases.
Toncoin (TON) was the only major cryptocurrency in the green, gaining 5% over the past 24 hours.
Gold Surges Amid Market Uncertainty
While cryptocurrencies declined, gold prices surged past $3,109 in early Asian trading, continuing a strong rally that began in March. Traditional markets also showed signs of distress, with the MSCI World Index experiencing its longest losing streak in a month, and Asian equities facing their biggest drop since late February.
Bitcoin Options Expiry and PCE Data Loom
Over $12.2 billion worth of Bitcoin options are set to expire, with the max pain level at $85,000, a critical juncture that could dictate short-term price movements.
According to analysts at Singapore-based QCP Capital, Bitcoin’s spot price remains range-bound while open interest declines, indicating a lack of strong bullish momentum. Traders are watching the PCE Index release closely, as it could influence Federal Reserve policy and impact risk appetite in the broader market.
How the PCE Data Affects Bitcoin
The PCE Index, a key measure of inflation, influences Federal Reserve interest rate decisions. A higher-than-expected reading signals rising inflation, which could prompt rate hikes, reducing risk appetite and putting downward pressure on Bitcoin prices. Conversely, a lower PCE figure suggests subdued inflation, increasing the likelihood of rate cuts, which may boost liquidity and support Bitcoin’s price as a speculative asset and inflation hedge.
The March 28 PCE report is expected to be a major market mover, with Bitcoin’s price direction likely to depend on how investors interpret the data in relation to Fed expectations.
U.S.-Canada Trade Tensions Escalate
Adding to market jitters, President Trump’s warning of deeper tariffs on Canada and the EU if they “collude” against U.S. economic interests has heightened fears of a trade war. In response, Canadian Prime Minister Mark Carney stated that Canada would seek to expand trade partnerships with other nations, citing concerns that the U.S. is “no longer a reliable partner.”
As economic uncertainty looms, investors remain cautious, closely monitoring macroeconomic developments that could shape the future of both traditional and crypto markets.
Conclusion
The cryptocurrency market remains on edge as macroeconomic factors, including U.S. trade policies and inflation data, continue to drive volatility. With Bitcoin options expiry and the PCE report on the horizon, traders should brace for potential price swings. While gold appears to be benefiting from economic concerns, the future of crypto markets remains uncertain, depending on global financial conditions and investor sentiment.
Disclaimer
This article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency markets are highly volatile, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.
