Tariff Shock Reveals a Two-Tier Crypto Market: BTC vs Everyone Else?

Trump’s “Liberation Day” tariff announcement sent shocks through global markets, shifting risk sentiment. Glassnode data shows equities dropped sharply, oil prices eased, and digital assets also fell. The policy move towards a weaker dollar and tighter fiscal spending hurt investor confidence, pushing capital away from crypto assets.

Crypto markets reacted with significant declines; Bitcoin and Ethereum posted double-digit losses. More importantly, underlying liquidity worsened, increasing volatility and making investors uneasy. All of this shows how macro events strongly affect crypto market structure and feeling.

Why is Crypto Market Liquidity Drying Up Post-Tariffs?

Since the beginning of 2025, capital flowing into Bitcoin and Ethereum has fallen sharply. Bitcoin’s monthly realized cap inflows have dropped from $100 billion to just $6 billion. Ethereum fared worse, sliding from $15.5 billion in inflows to $6 billion in outflows. This means holders are selling at a loss, locking in capital pain.

While Bitcoin’s realized cap has grown 117% since the FTX collapse, Ethereum has only added 32%. This uneven capital spread points to stronger investor demand and conviction behind Bitcoin. Ethereum, by contrast, is struggling to gain new buyers in this cycle.

Bitcoin Breaks Key Support: What Levels Must Hold to Avoid Further Drops?

Bitcoin’s fall below its 111-day and 200-day moving averages signals early weakness for the broader crypto in general. Breaking the 365-day Moving Average further confirmed downward pressure.

Moreover, Bitcoin now trades between $93k and $72k, flanked by the Short-Term Holder cost basis and its -1σ band. This range has become a battleground for bulls and bears. If prices fall below $71k, more holders could be underwater. The True Market Mean at $65k marks the bottom of this zone and a vital long-term support level. If broken, long-term sentiment may deteriorate rapidly.

Why Are Altcoins and Ethereum Hit Harder Than Bitcoin?

The altcoin market was hit hard, much harder than Bitcoin, declining from $1 trillion in December 2024 to $583 billion as of April 2025.

This 40% wipeout underscores the sector’s vulnerability to liquidity shocks and Ethereum’s underperformance continues.

The ETH/BTC ratio is now at 0.0196, the lowest in over five years. For 812 straight days, Bitcoin investors have held higher unrealized gains. This difference might change how investors build portfolios.

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