Impact of Tariff Announcements on Cryptocurrency and Global Markets
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Market Turmoil Following Tariff Announcements
The global financial markets were thrown into disarray following a significant tariff announcement by then-US President Donald Trump. The implications were far-reaching, with numerous assets, including the cryptocurrency XRP, experiencing substantial price drops. XRP saw its value diminish from $2.20 to $1.75 amid a wave of sell-offs across both traditional and digital markets.
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Financial Markets Lose Over $1.65 Trillion
According to insights from crypto analyst Oscar Ramos, the US stock market shed approximately $1.65 trillion in value as it opened following the tariff declaration. The president’s move to impose tariffs on nearly all countries globally initiated what many financial observers have termed a “financial bloodbath.”
The cryptocurrency market was not spared, as Bitcoin, which had recently regained a value of $88,000, plummeted back to $77,000. This sharp decline led to extensive forced liquidations on crypto exchanges. Data reveals that within a single day, over $500 million in trading positions were liquidated, comprising $348 million in long positions and $210 million in short positions.
Potential Market Bottom Identified
Ramos noted that XRP might be approaching a price floor by analyzing previous support levels. Similar price actions were noted earlier in the year when XRP fluctuated between $1.90, $1.80, and $1.70 due to earlier tariff talks involving Canada, China, and Mexico. Currently, XRP is trading at $1.69.
The analyst highlighted a bearish pattern known as the “Three Black Crows” on the crypto’s daily chart, suggesting potential further downward pressure. The Relative Strength Index (RSI) indicates that XRP has not yet hit oversold levels on daily charts, a status last observed in July 2024.
Potential for Further Price Drops
Should XRP enter oversold territory on the daily charts, Ramos projects a possible price dip to between $1.50 and $1.60. Despite these cautionary signals, he remains somewhat optimistic, viewing the maintenance of prices near $2 as a positive outcome.
XRP-specific liquidations contributed around $21 million to the market’s total forced closures, with $15 million in long positions and $6 million in short positions being eliminated due to the declining prices.
Introduction of Ripple USD Amidst Market Uncertainty
In the midst of market instability, Kraken, a prominent cryptocurrency exchange, introduced Ripple USD (RLUSD), a new stablecoin issued by Ripple, the company behind XRP. Although this launch might typically bolster market confidence, its impact was overshadowed by broader economic concerns.
Ramos has adopted a cautious approach to current market conditions. He has articulated a strategy focused on accumulating Bitcoin with the goal of owning a full BTC, while refraining from taking new positions in XRP until market conditions stabilize.
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