Trade War Fears Trigger Global Sell-Off

It’s been a volatile weekend across both traditional finance and crypto markets, as renewed fears of a global trade war rattled investor confidence. Escalating tensions between the U.S. and China have triggered a sharp sell-off, sparking a broad risk-off move.

While crypto initially showed signs of resilience, it has since followed equities lower—underscoring that no asset class is entirely shielded from macroeconomic uncertainty.

Here’s a quick overview of what’s happening:

What Sparked the Sell-Off?

Over the weekend, China announced a surprise 34% tariff on U.S. imports, marking a significant escalation in the ongoing trade dispute between the two economic superpowers. The move comes in direct response to recent U.S. trade measures, including increased tariffs and stricter restrictions on Chinese tech exports.

Although the new tariffs aren't set to take effect until April 10, markets reacted immediately. The announcement reignited fears of a prolonged trade war—one that could disrupt global supply chains, slow economic growth, and dampen corporate earnings across multiple sectors.

While the delay before implementation leaves room for potential diplomatic negotiations, investor sentiment remains fragile. For now, the prevailing concern is that tensions could spiral further, with both sides digging in rather than de-escalating. This uncertainty has sparked a broad shift to risk-off positioning across global markets.

What Happened in the Markets?

• Dow Jones: Fell 2,231 points (-5.5%) to 38,314.86 — one of its worst sessions in 5 years.
• S&P 500: Dropped 5.97% to 5,074.08 — down over 17% from its recent high.
• Nasdaq: Slipped 5.8% to 15,587.79 — officially entering bear market territory, down 22% since December.
• Bitcoin (BTC): Fell below US$80,000 for the first time in five months. 
• Ethereum (ETH): Dropped to US$1,500 — prices not seen since October 2023.
• Altcoins: Suffered sharper declines across the board, with most registering double-digit losses.

(Source: Cryptocurrency Heatmap - 7 day ROI for top 200 Cryptocurrencies)

What to Watch Next?

The focus now shifts to how the U.S. and China navigate the days ahead. If tensions ease or negotiations resume before the April 10 deadline, markets may find some footing. However, if the rhetoric escalates, further downside can’t be ruled out. In the meantime, heightened volatility is likely to persist, and risk appetite may remain subdued.

Importantly, the current sell-off is not driven by crypto-specific catalysts. These moves are part of a broader market reaction to rising global trade tensions. Crypto is simply moving in line with traditional markets, not because of sector-specific issues. That distinction matters—and may shape how crypto responds if broader conditions begin to stabilise.