Author: ChandlerZ, Foresight News
On the evening of February 2 to the morning of February 3, the global financial market experienced violent fluctuations. The Altcoin market was the first to undergo a deep adjustment, with the price of Bitcoin falling below the psychological barrier of $100,000 in the evening and continuing to decline, reaching a low of $91,255 this morning, a single-day drop of 8.7%, the largest single-day volatility in nearly three months.
Major Altcoins were generally under pressure, with public chain tokens such as DOT, ADA, and SUI falling by more than 15%, and tokens in the AI sector such as VIRTUAL, SWARM, and AI16Z falling by more than 20% in the past 24 hours.
CoinGecko data shows that the total market capitalization of Altcoins shrank by $455 billion to $3.1 trillion within 24 hours, equivalent to wiping out the current market value of Amazon. The scale of derivatives market liquidation has expanded significantly, with Coinglass statistics showing that the 24-hour liquidation amount across the network reached $2.14 billion, of which $18.59 million was liquidated in Ethereum contracts and $6.187 million in Bitcoin contracts.
After the AI stocks were hit, the trade war further "added insult to injury" for the market
After the full-scale attack on AI stocks by DeepSeek, the US stock market has not yet recovered from the decline, and the Trump administration's sudden trade war has dealt another heavy blow to the financial market. On February 1, Eastern Time, Trump signed an executive order, announcing a 25% additional tariff on industrial goods from Canada and Mexico, a 10% tariff on energy products, and a 10% tariff on goods from China. This policy quickly provoked strong retaliation from trading partners, with Canada announcing retaliatory tariffs on $12.6 billion worth of US goods, and Mexico imposing 15% to 25% retaliatory tariffs on US agricultural products.
Although the White House insists that the tariff policy will not have an adverse impact on the US economy, economists generally express concern. Mary Lovely, a senior researcher at the Peterson Institute for International Economics, pointed out that this large-scale tariff increase may lead to a slowdown in US economic growth and further exacerbate inflationary pressures. The Wall Street Journal published an editorial titled "The Dumbest Trade War Ever," criticizing Trump's tariff policy for lacking economic rationality and potentially triggering an economic disaster. Many experts believe that this broad-based tariff policy will not only raise the prices of imported goods, but also disrupt the stability of the global supply chain, ultimately causing long-term damage to US economic growth.
Currently, the US economy is already plagued by high inflation, and the core PCE price index is still above the Federal Reserve's target level in 2024. The implementation of the tariff policy will directly lead to a rise in the prices of imported goods, further compressing the Federal Reserve's monetary policy space. In the interest rate cut cycle, the traditional interest rate hike to curb inflation is difficult to implement, which may lead to long-term high inflation and increase economic uncertainty.
The policy shocks have quickly transmitted to the global capital market, triggering a chain reaction. US stock index futures generally fell in the Asian session, with Nasdaq 100 futures down 2.4%, S&P 500 futures down 1.9%, and Dow Jones futures down 1.35%. The Asia-Pacific market also weakened in sync, with the Nikkei 225 index falling 2.1% in early trading, the KOSPI index's technology sector leading the decline by 3.8%, and Australian resource stocks falling 2.6% under the impact of the tariff policy. The synchronized global market decline reflects investors' concerns about the escalation of the trade war and the economic outlook, and the market sentiment tends to be cautious.
What is the trend of the Altcoin market? US policy influence remains important
It is worth noting that the linkage between the Altcoin market and macroeconomic policies has been strengthened. Although the Trump administration had previously sent signals of supporting the development of digital currencies, the latest statement from the White House economic adviser that "the digital currency strategy requires a more prudent legislative process" has weakened the market's expectations for short-term policy benefits. Matrixport analyst Daniel Yan pointed out: "In the absence of endogenous growth momentum, the Altcoin market is becoming a barometer of macroeconomic sentiment, and the current volatility reflects more the adjustment of global liquidity expectations."
In addition, the risk-averse sentiment and liquidity issues caused by market volatility have also led to a premium in the over-the-counter price of USDT. The over-the-counter price of USDT (buy 1) is temporarily reported at 7.54 yuan, while the current exchange rate of the US dollar against the renminbi is 7.2513 yuan, with a USDT premium of 3.98%.
Although Bitcoin has started to decline, there are still some views that are optimistic about the overall trend in 2025. Binance CEO Richard Teng said that under the regulatory changes led by Trump, the strategic initiatives of the United States, and the momentum of support for Altcoins, Bitcoin is expected to hit a new high in 2025. He believes that the Trump administration's policies may bring the much-needed regulatory clarity and drive the next stage of growth for Altcoins such as Bitcoin.
In terms of institutional views, there is a significant divergence. Morgan Stanley has downgraded its rating on Altcoin assets from "overweight" to "neutral," believing that "the market needs time to digest policy uncertainty"; while Fidelity Investment analysts believe that "short-term oversold conditions may brew technical rebounds." Trader Ansem analyzed on social media: "Unless the trade dispute substantially deteriorates, the current panic selling may be an overreaction, but the Altcoin market needs more time to repair its technical structure."
Overall, the global financial market is facing multiple challenges, and the violent fluctuations in the Altcoin market and the shocks of macroeconomic policies are superimposed, leading to extremely fragile market sentiment. Investors need to closely monitor policy trends and changes in market liquidity, and respond cautiously to possible further volatility.
