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04.02.2025 11:34 AM
Why crypto market perks up susprisingly quickly

After yesterday's news about the introduction of trade tariffs by the White House, the total volume of liquidations in the cryptocurrency market exceeded $2 billion. However, shortly after, as reports emerged that tariffs on Mexico and Canada would be postponed for one month, Bitcoin and Ethereum quickly regained their positions—though Ethereum had a much harder time doing so.

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Despite the fluctuations triggered by new economic measures, investors are beginning to recognize the resilience of the cryptocurrency market. Bitcoin's recovery was seen as a positive sign by many investors, highlighting its ability to respond swiftly to changes in the investment climate. This underscores Bitcoin's role not only as an asset but also as a hedging instrument. Ethereum, on the other hand, faced greater challenges, with its recovery hindered by liquidity constraints and technical factors.

The situation with trade tariffs serves as a reminder of the deep interconnection between traditional financial markets and cryptocurrencies. Macroeconomic uncertainty is forcing traders to reassess their strategies, which could lead to further volatility in the future. However, for long-term investors, such market behavior presents yet another opportunity to capitalize on high-risk conditions.

Trump's WLFI and Ethereum's struggle

When it comes to Ethereum's difficulties, the Trump-backed project World Liberty Financial (WLFI) provided some support. According to Cointelegraph, the fund purchased 86,000 ETH worth $220,000 yesterday—far below its usual ETH purchases of $10 million per lot. This led to Ethereum's balance doubling within the fund.

Ethereum's sharp decline has been a hot topic in the cryptocurrency community, and World Liberty Financial's actions have only fueled interest in the token. The purchase of 86,000 ETH for $220,000 might seem like a minor transaction in an active market, but its impact on supply and demand dynamics should not be underestimated.

Funding from major players like WLFI creates a positive trend that could encourage other investors to buy Ethereum. Expectations for the token's future are rising, potentially leading to new investments and further price growth. Moreover, the emergence of more direct and large-scale investments in ETH could boost trust in the cryptocurrency.

Bitcoin's long-term outlook amid tariff reversals

Another key issue is the trade tariffs imposed and then temporarily revoked by Trump. According to several experts, this could lead to long-term BTC price growth due to the weakening of the US dollar on global currency markets and a decline in US Treasury bond yields.

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Technical outlook for Bitcoin

Currently, Bitcoin buyers are targeting a return to the $99,500 level, which would open a direct path to $101,200, bringing BTC within reach of $102,600. The furthest target is $103,800, and breaking this level would signal a return to a medium-term bullish market.

In case of a downturn, buyers are expected to step in at $97,900. A move below this area could rapidly push BTC down to $96,500, with $95,600 being the next key level. The furthest support stands at $93,200.

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Technical outlook for Ethereum

Ethereum's firm consolidation above $2,733 opens a direct path to $2,787, with the next target at $2,843. The ultimate goal is the yearly high of $2,889—breaking this level would confirm Ethereum's return to a medium-term bullish market.

If a correction occurs, buyers are expected at $2,665. A move below this zone could push ETH quickly down to $2,609, with the furthest downside target at $2,532.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
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