After an initial reaction to former President Donald Trump’s proposed tariffs that sent the cryptocurrency market sharply downward, a managed recovery staged an impressive turnaround for digital assets Monday.
Panic sellers that had liquidated their positions in the fear of further losses were left to rue their bad decisions as the virtual market swiftly reversed course.
Gaining notable ground were several digital tokens, including Ethereum and a number of Sonos-owned assets that were among the top performers for the day. Meanwhile, trading volume across the crypto market has seen a remarkable spike, rising by nearly 94% over the past week compared to the week before, and bringing trading levels close to those seen during Trump’s inauguration a week earlier.
Strong Recoveries Across Key Assets
Monday’s sell-off, sparked by fears about the effect of Trump’s tariffs on the global economy, sent shockwaves through the crypto sector. But as the day wore on, and traders had time to reassess the situation, the overall market began to recover, and several individual cryptocurrencies posted impressive gains. Mantra (OM) led that recovery with a stunning 23% boost, followed closely by DeXe (DEXE) with an 18% surge.
Both Ethena (ENA) and its staked counterpart, Staked Ethena, saw a 17% jump, with Mantle (MNT) matching that gain with another 17% increase. These sharp recoveries certainly make it look as if the market overreacted to the president’s tariff announcement. They also exemplify what has become a recurring theme in the crypto market: sharp downturns followed by reversals of just as much—if not more—enthusiasm.
Trading Volume Soars Amid Market Volatility
Instead of focusing on the rebounds in prices, the developments over the past week with the surge in trading volume are most stunning. The surge in trading volume hasn’t just happened in a few select cryptocurrencies but, rather, has been a market-wide phenomenon seen across trading in both “up” and “down” days. The increase in trading volume this past week has been in excess of 94%-from a “calm” week prior. The result of this uptick obviously leads to an increase in investor engagement. Overall, it seems that the narrative of a “calm crypto market” is now unfurling to reveal a peaceful bear market just prior to the poking of a bull. Of course, one should always question the narrative, as few things seem to be universally good for the price of Bitcoin as it stabilizes around $8,000.
The volume indicates engagement from both retail and institutional investors, and when looking at it in conjunction with the price movement, the engagement seems to be overall positive.
Market Resilience in the Face of Uncertainty
Recent market movements underscore the crypto sector’s ability to withstand external pressures and recover quickly from sharp sell-offs. While initial market reactions to Trump’s tariffs suggested that potential economic disruptions were in store, the rally that started up as soon as the announcement was made suggests that many in the market are focused on the industry’s broader trajectory, rather than just on these short-term fears. The crypto market is maturing, and in our view, one sign of that maturation is the absence of any two-bit, mostly unregulated, “exchanges” in which the market can get as far out of order as we saw back in 2014. Volatility is a constant feature of life for anyone dealing in digital assets. And for traders looking for principal factors driving market moves, it seems strong economic figures and stable policy decisions are keeping this market moving up. And as we’ve noted before, the most sustained move in this market since its inception is up and to the right.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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