The cryptocurrency market experienced a turbulent start to the week,with notable losses over the weekend followed by a partial recovery on Monday. the volatility was largely driven by geopolitical developments and regulatory concerns,notably involving the United States. According to Bloomberg, the smaller symbol index, which had been struggling, saw its steepest rise in two days, reaching its highest level in nearly three years. This surge came after US President Donald Trump agreed to postpone a 25% customs fee on Mexico for one month, easing tensions in the market.
The MVIS CryptoCompare Small-CAP index, a key indicator for smaller cryptocurrencies, fell by 21% on monday, adding to an 11% drop from the previous day. Ethereum, the second-largest cryptocurrency by market capitalization, briefly plummeted by 27% before recovering some of its losses. This sharp decline highlights the sensitivity of digital assets to external economic and political factors.
the market’s recovery was fragile, with investors remaining cautious amid ongoing uncertainty. The postponement of tariffs provided temporary relief, but concerns about future regulatory actions continue to loom. As the cryptocurrency market matures, its susceptibility to global events underscores the need for investors to stay informed and adaptable.
Key Market Movements (January 31, 2025)
| Cryptocurrency | Performance | Key Event |
|—————————|————————–|——————————————————————————-|
| MVIS CryptoCompare Small-CAP | Fell by 21% | Trump’s decision to postpone tariffs on Mexico |
| Ethereum | Briefly fell by 27% | Market volatility driven by regulatory concerns |
| Smaller Symbol index | Rose sharply | Recovery after geopolitical tensions eased |
The cryptocurrency market’s resilience in the face of such challenges is a testament to its growing maturity. However, as highlighted by recent events, it remains highly reactive to global developments. Investors are advised to monitor geopolitical trends and regulatory announcements closely, as these factors will likely continue to shape the market’s trajectory in the coming months. For more insights into the evolving landscape of digital assets, explore the latest analysis on crypto market forecasts and institutional perspectives.Bitcoin and ethereum Plummet Amid market Uncertainty and Trump’s Crypto Policies
The cryptocurrency market experienced a sharp downturn this week, with Bitcoin dropping nearly 5.9% to $98,620 at 12:13 pm in New york, while Ethereum fell by about 6% to $2,730. The sudden decline has left traders reeling, as long-term positions were liquidated en masse, exacerbating the market’s volatility.
According to Bloomberg, the intensity of Ethereum’s decline caught many off guard.“It is an old story at the time.Where there were large liquidations in the DeFi space specifically, knowing that Ethereum is the original currency of DeFi,” said Matthew Hagan, Chief Investment Officer of Bitwise.The wave of liquidations has been particularly severe, with the two-day PVIS index recording its worst performance since May 2022, when the collapse of the TerraUSD stablecoin sent shockwaves through the crypto markets.
The uncertainty surrounding former President Donald Trump’s policies has added fuel to the fire. Despite being one of the most supportive U.S. presidents for the crypto industry,Trump’s recent moves have failed to stabilize the market. On January 24, he signed an executive order establishing a working group tasked with providing clear regulations for U.S. cryptocurrencies within six months. The group is also examining the construction of crypto stocks, but these efforts have yet to reassure traders.“The panic appeared quickly. With the sale that generates the sale, initially on the immediate market, before the situation escalated to the derivatives with a long, huge liquidation,” said K33 Research’s head of research.This sentiment was echoed across the market, as the total value of the cryptocurrency market decreased by approximately $360 billion on Monday, according to CoinGecko.
Even memecoins tied to Trump and his wife, Melania, were not spared. These tokens, which had previously surged in popularity, saw their values plummet by 75% and 90%, respectively, from their peaks.
Key Takeaways
| Metric | Details |
|————————–|—————————————————————————–|
| Bitcoin Price | Dropped 5.9% to $98,620 |
| Ethereum Price | Fell 6% to $2,730 |
| Market Loss | Total cryptocurrency market lost $360 billion |
| Memecoin Decline | Trump and Melania memecoins down 75% and 90% from peaks |
| PVIS Index | Worst two-day performance as May 2022 |
The recent downturn underscores the fragility of the crypto market, which remains highly sensitive to regulatory developments and macroeconomic factors. As traders navigate this turbulent landscape, the industry awaits clarity from Trump’s working group, hoping for a more stable future.
For more insights into the latest trends in cryptocurrency, explore our in-depth analysis here. Stay updated on market movements and regulatory changes by subscribing to our newsletter.
