ETH, DOGE Price Outlook: Impact of Trump’s Tariffs on Cryptocurrencies
The latest round of tariffs introduced by U.S. President Donald Trump, combined with a lack of immediate catalysts, is creating a cautious sentiment in the market, with Ethereum’s ether (ETH) potentially being especially vulnerable.
On Sunday, Trump announced a 25% tariff on all steel and aluminum imports into the U.S., building on existing tariffs, and warned of reciprocal tariffs for all countries later in the week. The announcement, alongside rising inflation expectations, has raised concerns about potential market volatility, with key indicators that previously predicted bitcoin’s surge above $100,000 now turning bearish.
The major cryptocurrencies, including Bitcoin, Ether, XRP, Solana’s SOL, and Dogecoin (DOGE), remained mostly unchanged during European trading hours on Monday. U.S. futures, including the Dow and S&P 500, were up 0.46% as markets prepared for the New York open. Bitcoin, Ether, XRP, SOL, and DOGE saw minimal price increases, all rising by less than 1% in the past 24 hours. BNB Chain’s BNB, on the other hand, dropped 4.5% after a rally on Sunday.
Tariffs add uncertainty to the economy by potentially escalating trade wars, which historically leads to market volatility. These events usually prompt investors to shift away from riskier assets like cryptocurrencies, favoring safer investments.
Some traders are particularly concerned about Ether’s performance, given the broader downtrend in crypto sentiment. Ethereum’s struggles have already been evident in the declining Bitcoin-to-Ether ratio, which recently fell to 2021 levels, signaling preference for Bitcoin over Ethereum. ETH’s losses could also negatively impact related tokens, such as memecoins like Dogecoin (DOGE) and Ethereum-based DeFi tokens, which tend to follow Ether’s movements.
“The shift of BTC dominance over all other assets, especially over ETH, is becoming increasingly apparent. Ethereum is experiencing record short interest and significant fear, uncertainty, and doubt (FUD), with the second-largest cryptocurrency down 23% year-to-date, while Bitcoin is up 2.5%,” said Augustine Fan, head of insights at SignalPlus.
Fan further explained that a lack of new Layer 1 (L1) catalysts and a lack of leadership in Ethereum’s narrative is likely to weigh heavily on its price in the near term. Meanwhile, Nick Ruck, director at LVRG Research, noted that Ethereum has been particularly hit hard, unwinding all the gains from its late November rally.
The economic outlook is also not helping, as inflation fears are pushing expectations for only one interest rate cut by the Federal Reserve this year, which casts a gloomy outlook for risk assets like cryptocurrencies.
Traders at QCP Capital in Singapore are anticipating continued volatility in the crypto markets, particularly due to the impact of Trump’s rhetoric. “A feedback loop is forming—President Trump is becoming increasingly sensitive to market reactions, and his actions are likely to add further volatility to the markets,” the firm noted in a broadcast message.
“Currently, Bitcoin volatility leans toward a bearish outlook with an emphasis on downside risk until at least April,” they concluded.
