Global markets have dropped to their lowest levels in six weeks on persistent fears of a trade war

In this situation, crypto markets are in a vulnerable position, especially altcoins like Ethereum and XRP, including Dogecoin. However, a subsequent stock market recovery also boosted these tokens.

Global markets dropped to their lowest levels in six weeks on Tuesday on persistent fears of a trade war, putting crypto markets in a vulnerable position, especially altcoins like Ethereum and XRP, including Dogecoin. However, a subsequent stock market recovery also boosted these tokens.

The S&P 500 index lost 19.14 points on Tuesday, falling to its lowest level since January on fears of a renewed trade war between the US and China. As traders reassessed risk, the crypto markets also dropped by 10.74%, with many tokens posting double-digit losses.

However, a subsequent stock market recovery in after-hour trading has also boosted crypto. For instance, after reaching a low of $1,996.77, Ethereum recovered to $2,168.21. XRP fell from its weekly high of $2.95 to a low of $2.23 before stabilizing at $2.49. Dogecoin touched a low of $0.1837 before recovering to $0.2001.

Still, the latest developments around US trade relations suggest that there may be more pain ahead. US President Donald Trump is not backing off his planned tariffs against Canada, Mexico, and China, among other countries. Among these, Canada already retaliated with tariffs on US goods, and Prime Minister Justin Trudeau called the trade war “a very dumb thing”.

What’s Next for Ethereum, XRP, and Dogecoin

The high volatility of these tokens highlights their persistent interconnection between traditional markets and crypto. For instance, Bitcoin declined to $81,529 before recovering to $88,647. Despite the narrative that Bitcoin is counter-cyclical, meaning that it rises when stocks fall.

In this environment, the crypto market faces an increased risk of another stock market fall. Notably, the S&P 500 index is indicating several bearish signals, falling below its 100-day exponential moving averages. The charts also show that the index fell below the long-term narrowing wedge, indicating further price drops.

Stop ignoring #stocks when evaluating #crypto!Blindly expecting #Bitcoin to take off toward $150k any day now while the S&P 500 is signaling multiple red flags is foolish.I'm not saying we can't get rallies, but the big picture technicals aren't looking good atm. pic.twitter.com/cv8p4IvgOA

The prevailing view among investors is that stock markets will continue to impact the crypto markets. This is especially important for altcoins, which are much more volatile than both stocks and Bitcoin. When a risk-off sentiment prevails in the markets, crypto assets like these will fall the hardest.

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