XRP and Dogecoin Surge 20%, Then Retreat as China’s Tariffs Hit Crypto Market

Crypto Rallies Before Reversing Amid China-U.S. Trade Tensions

Major cryptocurrencies saw gains of up to 20% in the past 24 hours as traders capitalized on a buy-the-dip strategy following Monday’s $2.2 billion liquidation event. However, those gains were erased after China announced retaliatory tariffs on the U.S., dampening the market’s momentum.

The price spike faded during Asian trading hours, coinciding with the U.S. tariff deadline passing without an agreement, triggering market uncertainty.

Despite the pullback, XRP, Dogecoin (DOGE), Solana (SOL), and Cardano (ADA) remain up nearly 3%, while Bitcoin (BTC) and Ether (ETH) have gained 4% in the past day.

Tariff Uncertainty Weighs on Market Sentiment

Ben El-Baz, Managing Director of HashKey Global, told CoinDesk that the U.S.-China tariff dispute could reduce risk appetite, potentially impacting the crypto bull market that has thrived over the past year. However, he noted that crypto-friendly policies in the U.S. could help counteract this damage.

Market analysts remain divided on the long-term impact of China’s response. While some expect a temporary setback, others fear a prolonged downturn if additional actions are taken against China under Trump’s administration.

Bitcoin Still Trades Like a Risk Asset

Min Jung, a research analyst at Prestro Research, highlighted that Bitcoin still behaves like a risk asset, despite its growing perception as digital gold.

“China’s 10% retaliatory tariff on the U.S. is impacting crypto much like global equity markets,” Jung explained. “While today’s sell-off may be an overreaction, volatility is expected to persist as traders assess whether this move is a negotiation tactic or a lasting trade dispute.”

What’s Next for Crypto Markets?

Trump’s decision to impose tariffs on Canada, Mexico, and China sparked a sell-off in both crypto and equities, shifting investor attention away from his pro-crypto stance toward the economic consequences of a trade war.

Monday’s massive liquidation event gave traders a buy-the-dip opportunity, increasing demand for stablecoins as a hedge against economic instability. However, continued retaliatory measures could escalate the situation, leading to further market volatility in the coming days.

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