Key Insights:
- Bitcoin and Ethereum dropped as trade tensions between the U.S. and Canada spooked crypto investors over the weekend.
- The Federal Reserve’s upcoming decision is expected to keep rates steady, with focus on future policy signals.
- Strong earnings from tech giants may support a broader market rebound, including crypto, if risk sentiment improves.
The cryptocurrency market declined over the weekend as renewed trade tension between the United States and Canada and anticipation around the Federal Reserve’s interest rate decision unsettled investors. Bitcoin dropped by 1.11 percent to $88,700, while Ethereum slipped by 0.53 percent to $2,930. Other altcoins such as Solana and Dogecoin recorded losses of over 1 percent.
The decline followed former President Donald Trump’s remarks warning of a 100 percent tariff on Canadian imports. He criticized Canada’s recent trade agreement with China, which lowered tariffs on electric vehicles. The deal includes reducing tariffs on 49,000 Chinese EVs from 100 percent to 6%, raising concerns in Washington over trade imbalances. Trump also mentioned Canada’s tariff policy on canola as a point of contention.
Investor Sentiment Dips as Fear Index Stays Negative
The market reaction coincided with the Crypto Fear and Greed Index remaining in the fear zone. The tariff threat reintroduced concerns about a potential trade war that could dampen global risk sentiment. A full-scale trade dispute between the U.S. and Canada, key trade partners, could have widespread implications across commodities, tech, and risk assets, including crypto.
Market participants now await the upcoming Federal Reserve decision, scheduled for Wednesday. Economists widely expect the Fed to maintain interest rates at their current range of 3.50 to 3.75 percent. A recent Polymarket poll placed the odds of no change at over 98 percent. However, traders will closely watch for any signals about future rate cuts, which could support a crypto rebound.
Corporate Earnings and Regulatory Developments in Focus
Additionally, investor attention is turning to quarterly earnings from major technology companies such as Apple, Microsoft, and Meta Platforms. As these firms lead AI investment and hold significant influence in equity markets, their performance could affect crypto indirectly. Moreover, discussions on the CLARITY Act and the possibility of a U.S. government shutdown also remain on the radar.
