The discussions on cryptocurrencies are becoming increasingly lively, especially as social media platforms react to major political and economic moves. Negative sentiment around Trump is increasing, with concerns that policies such as tariffs and the US Strategic Cryptocurrency Reserve proposal could impact the market. Investors are worried that tariffs imposed on Canada, Mexico, and China could cause volatility in both cryptocurrencies and stocks. At the same time, debates over the legitimacy of the US cryptocurrency reserve have erupted, with doubts about which assets should be included, such as Bitcoin, Ethereum, XRP, Solana, or Cardano.
The cryptocurrency market continues to fluctuate, keeping traders in a state of tension. Bitcoin is struggling to maintain its position, falling below $91,000 once again and currently oscillating around $85,000. While institutional adoption and regulatory progress are ongoing, short-term price action remains weak, according to Nansen's analysis. AI Tokens have also been hit the hardest, with most Layer-1 projects suffering double-digit losses YTD, with XRP (+5.3%) being the exception.
Ethereum's on-chain activity has decreased significantly, with the Medium gas price dropping to 1 GWEI, the lowest in over a year. While Ethereum's Layer-2 networks like Base are still operational, overall market participation appears to be declining. DeFi Tokens have also struggled, except for MKR (+10.85%), which has benefited from the adoption of USDS. Other DeFi projects like ENA and AERO have declined more than 50% since the beginning of the year.
The market sentiment is polarized, with some seeing the current price action as a test of the downtrend, while others believe a recovery is underway. Bitcoin's return to its previous range suggests a recovery scenario is more likely. Many Tokens have retraced their post-election price gains and may need time to recover. With the weakness in price action across major sectors, Nansen's analysts maintain a neutral to pessimistic short-term outlook but remain optimistic in the long term.
Traders are focusing on stablecoin yields rather than chasing altcoin pumps, waiting for a clearer trend reversal before making major decisions. For now, Bitcoin has returned to its previous range, and sentiment remains chaotic. Some see the current price decline as an opportunity to accumulate core assets like BTC, SOL, and TIA, while others believe further downside is possible. Until a clearer trend emerges, the market remains in a state of anticipation.
