On Friday, XRP and Dogecoin (DOGE) experienced a sharp decline of over 10%, leading the downward trend among major cryptocurrencies as new U.S. tariffs on China unsettled Asian markets. This added to an already rocky week for the crypto sector.

Bitcoin (BTC) fell by 7%, approaching $79,000 — a level it hasn’t seen since November — marking a nearly 30% drop from its January high of over $108,000. Other cryptocurrencies, including Ether (ETH), Cardano (ADA), and BNB from the BNB Chain, also faced significant losses, each dropping at least 9%.

The overall market capitalization decreased by 8%, settling at $2.7 trillion, effectively erasing all progress made since the election of former U.S. President Donald Trump in early November. The broad CoinDesk 20 (CD20) index fell nearly 9% as well.

Despite a robust earnings report from Nvidia on Wednesday, the market could not shake off its pessimism as global stocks struggled, impacted by rising tariff concerns, an ailing economy, and overstretched market positions. This unfavorable sentiment has naturally extended to the crypto market due to Bitcoin’s high correlation with the S&P 500, according to traders.

“Year to date, altcoins excluding Bitcoin and overall trading sentiment have faced significant challenges due to liquidations stemming from multiple memecoin surges, while Bitcoin has also experienced pressure from ETF sell-offs, which hit record levels last week,” noted Augustine Fan, head of insights at SignalPlus, in a Telegram message to CoinDesk.

The declines in cryptocurrency values echoed the downturn in Chinese stocks, which plummeted following Trump’s announcement of a new 10% tariff on Chinese imports. This development heightened concerns over a potential trade war between the U.S. and China, the two largest economies in the world.

This latest tariff adds to an existing 10% tax on Chinese goods that was implemented earlier this month, further straining China’s economy, which is already grappling with a property crisis and declining prices. It may also impede the upward momentum of the stock market, which has been buoyed by advancements in China’s AI sector, particularly from competitors like DeepSeek, which rivals ChatGPT.

This announcement comes just before China’s National People’s Congress, an important annual meeting set to commence next week, where leaders are anticipated to unveil their economic strategies and growth objectives.

Any decisions made by China regarding increased spending or consumer incentives to stimulate economic growth could significantly influence Bitcoin and overall crypto prices, serving as a critical catalyst in the market — making it a key focus for the upcoming week.

However, sentiment remains largely bearish among some Bitcoin traders leading up to this period.

“Bullish options traders appear to be giving up as volatility declines alongside lower spot prices, with many opting to sell call options in favor of puts,” Fan remarked from SignalPlus.

“Additionally, worries surrounding MSTR (-10%) are contributing further risk to Bitcoin, especially considering their investments in convertible funds, intensifying bearish sentiment across various technical indicators.”