The crypto market slid over the weekend as renewed trade war concerns dampened risk appetite. Bitcoin (BTC) dropped to $88,700, while Ethereum (ETH) slipped to $2,930. Major altcoins including Dogecoin and Solana also declined by more than 1%. The Fear and Greed Index remained stuck in the fear zone.
Trump Threatens 100% Tariff on Canadian Goods
President Donald Trump warned that he would impose a 100% tariff on Canadian products entering the U.S., blaming Canada for strengthening ties with China. Ottawa recently lowered EV tariffs on Chinese imports from 100% to 6% for about 49,000 vehicles, and also cut levies on canola. The potential trade war would have severe implications given the two countries' massive trade volume.
On the positive side, some traders bet on the "TACO" scenario — Trump Always Chickens Out. Alternatively, the Supreme Court could rule the tariffs illegal.
Fed Rate Decision Looms
The Federal Reserve will announce its interest rate decision on Wednesday. Economists expect rates to stay unchanged at 3.50%-3.75%, with Polymarket pricing a 98%+ probability of a hold. If the Fed hints at more cuts later this year, crypto could rebound. However, such guidance may be complicated by upcoming leadership changes at the central bank.
Big Tech Earnings in Focus
Apple, Microsoft, and Meta Platforms — part of the "Magnificent Seven" — are set to report earnings this week. These AI-heavy companies heavily influence market sentiment. Strong results could fuel a risk-on shift that lifts both equities and cryptocurrencies.
Traders are also watching for a potential U.S. government shutdown and progress on the CLARITY Act, which could add volatility to an already fragile environment.