Tariffs by U.S. President Donald Trump and Lack of Short Term Catalysts is Inciting Caution from Market Watchers

Who believe Ethereum's ether (ETH) may be particularly affected.

Fresh U.S. tariffs and a lack of near-term catalysts prompted market watchers to sound the alarm, especially for Ethereum’s ether (ETH) token, while bitcoin remained little changed Monday.

President Donald Trump on Sunday said he will introduce 25% tariffs on all steel and aluminum imports into the U.S., over and above existing duties, with reciprocal tariffs later in the week to be applied to all countries. The rhetoric and a spike in inflation expectations could herald bearishness.

Crypto majors clocked minor gains into European afternoon hours Monday, while U.S. futures Dow and S&P 500 were up 0.46% ahead of the New York open. Bitcoin, ether, XRP, Solana’s SOL and dogecoin (DOGE) were up less than 1% in the past 24 hours, as BNB Chain’s BNB lost 4.5% after a Sunday rally.

Tariffs introduce economic uncertainty by potentially escalating trade wars, which can lead to market volatility – such events tend to impact bitcoin and the broader crypto market as investors typically pivot from risk assets to safer investments.

Some traders say ether could be further impacted as sentiment for crypto fades down, adding to an already tumultuous year for the asset which saw a widely-watched bitcoin-ether ratio drop to 2021, indicating a fallout for ETH and preference for BTC.

A drop in ETH may further herald bad news for related beta bets such as memecoin dogecoin (DOGE) and Ethereum-based decentralized finance (DeFi) tokens, which tend to mirror the movements of the parent asset.

“The rise of BTC vs everything else is the most evident in comparison with ETH, which is seeing record short-interest and FUD with the 2nd largest token being down -23% YTD vs a +2.5% gain in BTC,” Augustine Fan, head of insights at SignalPlus, told CoinDesk in a Telegram message.

“At the risk of sounding like a broken record, but a lack of Layer 1 catalysts and narrative leadership will likely continue to weigh on Ethereum in the foreseeable future,” agregó Fan.

“Ethereum has been hit particularly hard as ETH reversed its entire pump from late November last year, unwinding any gains to holders,” said Nick Ruck, director at LVRG Research, in a Telegram message. “Inflation expectations have resulted in traders pricing in only one Federal Reserve interest rate cut this year, which bodes poorly for risk assets like crypto.”

In other news, traders at Singapore-based QCP Capital expect crypto markets to flip-flop in the coming weeks as Trump’s words continue to impact markets.

“A feedback loop is emerging – President Trump, highly sensitive to market reactions, is facing a market increasingly calling his bluff. This could embolden him further, adding another layer of volatility,” the firm said in a Monday broadcast message.

“BTC volatility now skews in favor of puts until April, reflecting a lack of upside catalysts,” it concluded.