ETH and DOGE Outlook: Trump’s New Tariffs and the Effect on Crypto Markets
The latest tariff announcements by U.S. President Donald Trump are casting a shadow over the cryptocurrency market, particularly affecting assets like Ethereum (ETH) and Dogecoin (DOGE), which are already navigating a turbulent year.
On Sunday, Trump revealed plans to introduce a 25% tariff on all steel and aluminum imports to the U.S., increasing the pressure on global trade. These tariffs will be accompanied by additional reciprocal tariffs to be implemented later in the week. Market analysts are now watching for possible economic ramifications as inflation expectations begin to rise. This news has had an immediate impact, with a major indicator that previously predicted Bitcoin’s surge past $100,000 when it was under $70,000 turning bearish on Sunday.
As of Monday afternoon in Europe, cryptocurrencies such as Bitcoin, Ether, XRP, and Solana’s SOL were mostly flat, while Dogecoin (DOGE) saw modest gains under 1%. Meanwhile, Binance Coin (BNB) dipped by 4.5% after its Sunday rally. U.S. futures saw a slight boost, with the Dow and S&P 500 rising by 0.46% ahead of the New York market’s opening.
The introduction of these tariffs could cause significant economic uncertainty by further escalating trade tensions, which is known to increase market volatility. Historically, these types of events tend to drive investors away from riskier assets like cryptocurrencies, pushing them toward safer, more stable investments. This shift in sentiment may hit Ether the hardest, as it struggles to regain momentum in the market.
Ethereum, in particular, is under pressure as investor sentiment shifts more in favor of Bitcoin. The Bitcoin-to-Ethereum ratio has dropped to levels unseen since 2021, signaling a preference for Bitcoin over Ether. This has contributed to Ethereum’s underperformance, especially as ETH has seen a decline of 23% year-to-date, while Bitcoin has experienced a modest 2.5% gain.
“Ethereum’s struggles are evident,” said Augustine Fan, head of insights at SignalPlus. “The lack of clear catalysts and leadership from Layer 1 solutions will likely continue to hinder ETH’s price action.”
The outlook for Ethereum has been worsened by a reversal of the gains seen in late November 2024, leading to losses for investors who had hoped for continued price growth. Additionally, traders are bracing for slower economic recovery, with inflation concerns leading to expectations of only one interest rate cut from the Federal Reserve this year, which could further dampen the sentiment surrounding risk assets, including cryptocurrencies.
Market watchers at QCP Capital in Singapore are predicting further volatility in the crypto markets, as Trump’s tariff policies continue to affect sentiment. “We’re entering a feedback loop. President Trump, increasingly aware of market reactions, may lean further into this trade war rhetoric, adding more uncertainty,” they noted in a broadcast message on Monday.
“Bitcoin’s volatility is currently tilted toward downside risk, as the market struggles to find catalysts for upward movement until at least April,” QCP Capital concluded.
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