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Investing.com -- Ethereum, the second-largest digital asset by market value, experienced a significant drop today, as leveraged bets on the cryptocurrency began to unravel.
The sell-off came on Monday, following announcements of tariffs by US President Donald Trump, causing a negative shift in investor sentiment.
The reaction of the cryptocurrency market "to the latest U.S. tariffs is a reminder that macroeconomic policies don’t just impact traditional markets—they also shape liquidity and risk appetite in crypto," Ran Yi, Co-Founder of Orderly Network, told Investing.com.
"While short-term volatility is unavoidable, the long-term trajectory of digital assets is driven by broader structural trends, not isolated policy shifts. Crypto markets have weathered far greater disruptions and will continue to adapt as global financial conditions evolve."
The unexpected severity of Ether’s plunge caught traders by surprise. Many who had taken long positions in the token, anticipating a recovery against Bitcoin, were forced to unwind those bets as the market turned against them. This led to a wave of liquidations.
Analysts have pointed to Ether’s significant role in decentralized finance markets as a key factor in its sharp decline.
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