Bitcoin (BTC) dominance — a measure of Bitcoin's share of the total cryptocurrency market cap — broke above 60% on Feb. 2 amid a general downturn in the crypto markets in response to US President Donald Trump's trade tariffs.
Altcoins were hit hardest by the downturn, with Ether (ETH) falling by roughly 9.3% over the last seven days, XRP (XRP) losing 13.8%, and Solana (SOL) losing approximately 19.3% in the last week, according to CoinMarketCap.
The President's newly imposed tariffs included a 25% tax on imports from Canada, 25% on all products from Mexico, and 10% on all goods from China, which prompted counter-tariffs from the countries.
Fearing increased inflation from the newly ignited trade war and forecasting high interest rates for much of 2025, investors fled riskier assets for US government securities.
Current Bitcoin dominance at 60.59%. Source: TradingView
Related: Stablecoin market cap surpasses $200B as USDC dominance rises
More short-term pain likely coming
According to trader and analyst Van Nuener, crypto markets may dip again following the open of US futures markets on Feb. 2.
"The futures will probably open down and that may cause crypto to do the same," Nuener warned followers on social media.
BitMEX co-founder Arthur Hayes predicted a crypto sell-off around President Donald Trump's inauguration in a December 2024 article.
Hayes argued that the optimism surrounding the election of the pro-crypto President would wear off once traders realized that passing crypto legislation would likely take some time and is not an overnight process.
Ryan Lee, chief analyst at Bitget Research, recently forecasted a potential BTC correction to the $95,000 price level in the near term.
The analyst told Cointelegraph that macroeconomic factors, including labor statistics and federal reserve policy, will play a critical role in determining Bitcoin's price in the coming weeks.
President Trump's tariffs come amid a recent downturn in US tech stocks and crypto following the scare caused by the release of DeepSeek R1 — an open-source AI model developed and trained in China.
Crash in Nasdaq 100 index following the release of DeepSeek R1. Source: TradingView
According to the DeepSeek whitepaper, the model performs on par with leading OpenAI models but was trained for a fraction of the cost using older computing hardware.
The launch of DeepSeek was characterized as a black swan event, prompting the Trump administration to consider even tighter export restrictions on Nvidia sales to China — sewing more uncertainty in financial markets.
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