- The cryptocurrency market saw a slight recovery after a bearish week, with Bitcoin, Ethereum, and XRP gaining 5.31%, 4.73%, and 6.65%, respectively, on March 11
- A temporary truce between the U.S. and Canada regarding tariffs influenced investor sentiment, momentarily reducing risk aversion in both traditional and cryptocurrency markets
- The Fear & Greed Index hit 15 points, signaling extreme fear in the crypto market, but recovery hints at cautious optimism among buyers despite ongoing trade tensions
Following one of the worst-performing days of the year, the cryptocurrency market showed a slight recovery on March 11.
On this date, assets like Bitcoin, Ethereum, and XRP are up by 5.31%, 4.73%, and 6.65%, respectively. While these losses are not enough to revert the weekly losses experienced by the market, they already showcase that buyers haven’t completely given up.
The reason for today’s recovery can be attributed to a momentary peace in the ongoing trade war between the U.S. and Canada.
A Fragile Truce Between Neighbors, Crypto Reacts
Digital assets have behaved incredibly volatile since the beginning of the month, mostly due to uncertainty regarding the United States Government’s foreign policy.
Donald Trump’s escalating economic threats against its three largest economic partners caused fears of inflation and a potential recession to return as a talking point amidst growing concerns over trade instability and its impact on global markets.
While Donald Trump’s plan to recover foreign debt by increasing tariffs on imported goods could bear fruit in the long run, the fact of the matter is that the immediate impact on American consumers could be significant, leading to higher prices on everyday goods and increased financial strain, particularly for lower-income households.
Today, the President announced a pause on his proposed 50% tariffs on Canadian steel and aluminum following Ontario’s decision to suspend its 25% electricity surcharge to U.S. states, as reported by CNN. This de-escalation comes as U.S. Commerce Secretary Howard Lutnick and Ontario Premier Doug Ford prepare to renegotiate the USMCA later this week.
This truce between the two neighboring nations was enough to lead investors to become—momentarily—less risk-averse.
Crypto Market Hit From “Extreme Fear” Levels
This week’s bearish downturn has led the crypto market to reach its lowest level on the ‘Fear and Greed Index’ since June 2022.
According to CoinMarketCap, Fear & Greed levels hit 15 points on the morning of March 11, indicating massive investor anxiety and extreme fear in the cryptocurrency market. This reading marks a direct contrast from the ‘extreme greed’ levels seen only a couple of months prior.
Although recent market performance appears disheartening, today’s rebound might signal the beginning of a narrative suggesting cryptocurrencies have potentially reached their bottom, but only time will tell.
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