Price gains after tax shock

Monday kicked off a turbulent week for investors in both stocks and crypto.

On Monday the week kicked off in turmoil for investors in both stocks and crypto. A massive sell-off pushed prices sharply lower. During the day the market recovered somewhat, but sentiment remained tense.

For a brief dose of euphoria, a rumor about a 90-day pause on trade tariffs provided a short-lived spark. That news briefly breathed new life into the markets. But it turned out to be a false alarm: the White House denied the report almost immediately. The supposed remarks by Trump adviser Kevin Hassett sparked extreme volatility. For example, the S&P 500's market cap briefly jumped by about $3 trillion, then fell just as quickly. According to The Koberissi Letter, this was "the largest 30-minute swing in market cap in history".

The crypto market was pulled along for the ride too. Bitcoin exploded from around $76,000 to above $80,000 in no time, but couldn’t hold the gain. Despite the brief bounce, the total value of the crypto market is still well below 24 hours earlier.

Data from CoinGlass shows that in this recent sell-off more than $1.6 billion in crypto leveraged positions were liquidated. And the figures may be even lower, as many exchanges report only sparingly via their APIs.

To pile on, Donald Trump in the afternoon fanned the flames. On his Truth Social platform he threatened 50% import tariffs on Chinese goods if China doesn’t roll back its retaliation measures by tomorrow.

Ethereum took a hit as well, sliding to its lowest level since January 2023. It has since recovered a bit and is above $1,500. Still, concerns are high. Kevin Rusher, founder of the RAAC platform, highlighted the situation: “A few months ago it seemed unthinkable for ETH to drop under $1,500. Analysts at the time even expected it to head toward $4,000.”

But Rusher doesn’t see this as the end of Ethereum, but rather an opportunity: “It’s an ecosystem with strong fundamentals. For long-term investors, this could be a good entry point.”

Market analyst Alex Krüger on a turnaround: View post on X He says: “The deeper the market falls, and the louder Republican criticism of tariffs gets, the greater the chance of positive signals. If the long-term rates in the U.S. implode today, I’d even see that as bullish. It would pressure Trump to seal deals.”

Finally, analyst Chu notes a short breather is coming: “The market is extremely oversold in the near term. A temporary uptick in risky assets makes sense.”