Crypto Market Dynamics Amidst Tariffs & Trade War Fears

Last Friday afternoon, President Trump announced new tariffs on Canada (25%), Mexico (25%), and China (10%). This news set off a selloff in the crypto market. Since traditional financial markets were closed for the weekend, they couldn’t react immediately, but we might see panic selling when trading opens on Monday. In response, both Canada and Mexico have threatened retaliatory tariffs on the U.S. Whether Trump is using this as a negotiation tactic or signaling a long-term policy remains uncertain, but one thing is clear—the market dislikes the idea of a trade war.

On the bright side, Bitcoin was already due for a significant correction. Even a 30% drop from its current all-time high wouldn’t derail the Macro Trend. However, the concerning part is that Trump’s actions could lead to further economic pain for both the U.S. and global economies before any recovery happens.

Because so many factors are in play, I’ve combined four key metrics into one chart to help us see where money is moving. Here’s what the chart shows:

BTC.D (Candles): This indicates Bitcoin’s dominance in the market.
BTC Price (Orange): The current price of Bitcoin.
TOTAL3 (Purple): The total crypto market cap excluding BTC and ETH.
USDT.D (Green): This measures the share of funds in USDT.

What Does the Chart Tell Us?

Flow of Money: Funds are moving between Bitcoin, altcoins, stablecoins (USDT), or leaving the market altogether.

Key Indicator – USDT.D:
Below the Breakout Line: If USDT.D stays below a critical level, it suggests that buyers are stepping in to support both Bitcoin and altcoins.
Above the Local Top: If USDT.D breaks above its recent high, it signals increased market fear. In this case, we should watch the other metrics:
A spike in TOTAL3 indicates that altcoins are gaining traction, hinting at a potential altcoin season.

A spike in BTC.D suggests that Bitcoin is maintaining or even strengthening its dominance.

A spike in USDT.D implies that investors are seeking safety in stablecoins, showing overall market nervousness.

By monitoring these indicators, we can get a clearer picture of whether or not an alt season is developing, and whether the correction developing is a temporary setback or the start of a deeper decline.