Why is Crypto Down Today and Will it Recover? Check Main Reasons

The global crypto market is facing a tough day. The market cap has dropped to $2.66 trillion, marking a 2.49% decrease in the last 24 hours, as per CoinMarketCap data. At the same time, the market volume shot up by 68.24%, reaching $131.21 billion. Most of this comes from stable coins, which now make up 97.06% of the market volume. This means more people are selling their coins and switching to stable assets due to fear of more losses.

Why Is Crypto Crashing?

Among the largest reasons for the crash on that day is the April 2 Trump tariff announcement . The President of the U.S. imposed broad tariffs on more than 180 nations. A 10% base tariff has now been imposed, and more for major countries: China (34%), India (26%), Vietnam (46%), and Cambodia (49%). The announcement has raised concerns of a worldwide trade war. Other countries such as Mexico and Canada are already preparing to strike back. With this increased tension, financial markets became unstable — and the crypto sector was not spared.

Another major reason is the decline in Bitcoin price. As per Ali Martinez analysis, It fell below the crucial $84,800 support point and is currently down at $83,155.56. This indicates that the market is shifting bearish in the short term.

Source: X

If the Coin cannot move back above major resistance levels of $85,479 or $86,057, we could potentially see a plunge down to $83,000 or possibly even $81,200.  This price action is making many users nervous.

There’s also uncertainty in the XRP community. A closed-door XRP SEC meeting is taking place today, where they might decide on the ongoing Ripple lawsuit. Although the SEC has reportedly withdrawn its appeal, legal experts say the case isn't over yet. This adds to the confusion among platform users, many of whom are waiting for clear regulations. A settlement could come within two months, but for now, fear is still present.

The Fear and Greed Index , a popular tool that gauges market emotion, has moved from “Fear” to “Extreme Fear” , now sitting at 25. This shows that investors are becoming extremely cautious, which often leads to more selling and panic.

Will Crypto Recover Soon?

Right now, major projects like Ethereum , Solana , XRP , and Cardano are also facing losses, according to CoinMarketCap. Ethereum has fallen by 4.28% to $1,792.85 , Solana is down 7.79% , sitting at $115.92 , and XRP is trading at $2.01 after a 4.42% drop . These numbers show that even strong coins aren’t safe from market pressure.

But there is still some hope. Two major events are coming up that might bring relief. The U.S. unemployment rate will be announced on April 4 , and experts expect it to rise slightly from 6.6% to 6.7%. The same day, Fed Chair Powell is set to speak. If these events bring positive signals or hint at stable economic plans, the industry could gain back confidence, and we might see a bounce.

Conclusion

Today’s crypto crash is mainly caused by the new Trump tariffs , falling Bitcoin prices, uncertainty in the XRP SEC case, and rising fear in the community. However, all eyes are now on upcoming announcements. If they turn out positive, there’s a good chance the crypto space could start recovering soon.