The fear gripping the US market has been hard to ignore, especially since President Donald Trump pushed for tariff trade wars as part of his campaign promises. But what’s really surprising is how this fear is now spilling over into the crypto market.
Bitcoin’s Fear and Greed Index has taken a sharp dive, dropping from over 70% – a sign of greed – down to about 50%.
Could this mean more turmoil ahead for Bitcoin and the broader crypto market?
Bitcoin Faces a Drop Ahead
As Coinpedia previously reported, Bitcoin’s price is now facing the possibility of dropping to its support level of around $91k after being rejected above $102k in the past two days. Since altcoins tend to closely follow Bitcoin’s price movements, the entire crypto market is likely to experience more short-term weakness.
New US Trade Restrictions and Their Impact
As part of efforts to counter drug trafficking from China, the US Postal Service has announced it will temporarily stop accepting international packages from China and Hong Kong, starting February 4, 2025. However, it will still process letters and flats from these regions.
This suspension will impact the e-commerce sector, especially companies like Shein and Temu, which rely heavily on cross-border trade. In 2024, an average of 4 million packages worth less than $800 were shipped daily from China to the US.
Interestingly, the use of digital assets in trade between China and the US has been on the rise. Payment methods like PayPal, Visa, Apple Pay, MasterCard, and Google Pay, which increasingly support digital assets, have become common in transactions between merchants and customers in these two countries.
