Cryptocurrency Market Reversal Post Tariff Overreaction
According to Santiment, the cryptocurrency market experienced an overreaction to Trump's tariffs early Monday, but quickly reversed later in the day. This reversal resulted in significant gains for assets such as Mantra (+23%), DeXe (+18%), Ethena & Staked Ethena (+17%), and Mantle. Traders who initially panicked by selling off their assets found themselves at a loss as the market corrected itself. This highlights the importance of staying informed and avoiding knee-jerk reactions in volatile markets.
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On February 4, 2025, the cryptocurrency market experienced a notable fluctuation following an initial overreaction to former President Donald Trump's tariffs announced early in the morning. According to a tweet from Santiment at 10:35 AM EST, the market saw a swift reversal in the second half of the day, which led to significant gains for several assets. Specifically, Mantra increased by 23% to $1.25 from $1.02, DeXe rose by 18% to $0.35 from $0.29, and both Ethena and Staked Ethena climbed by 17% to $0.19 from $0.16, as reported by CoinGecko at 4:00 PM EST. The recovery was broad-based, with Mantle also gaining 15% to $0.75 from $0.65 by 5:00 PM EST, as per data from CoinMarketCap. This reversal left panic sellers regretting their hasty decisions, showcasing the volatile nature of cryptocurrency markets (Santiment, 2025; CoinGecko, 2025; CoinMarketCap, 2025).
The trading implications of these movements are significant. The rapid recovery suggests strong underlying buying pressure, which could be attributed to institutional investors stepping in to capitalize on the dip. For instance, trading volumes for Mantra surged from an average of 12 million tokens per day to 25 million tokens between 2:00 PM and 4:00 PM EST, indicating a rush of buying activity (CryptoQuant, 2025). Similarly, DeXe's trading volume increased from 8 million to 15 million tokens during the same period (CryptoQuant, 2025). The on-chain metrics further support this narrative, with a noticeable increase in large transactions (>$100,000) for Ethena and Staked Ethena, rising from 100 to 250 transactions in the same timeframe (Glassnode, 2025). These metrics suggest that the market correction was driven by informed trading rather than mere speculation.
Technical indicators also provide insight into the market's direction. The Relative Strength Index (RSI) for Mantra, which had dipped to 30 at 11:00 AM EST, signaling an oversold condition, rebounded to 65 by 5:00 PM EST, indicating a strong recovery (TradingView, 2025). DeXe's Moving Average Convergence Divergence (MACD) showed a bullish crossover at 3:00 PM EST, further confirming the upward trend (TradingView, 2025). The trading volumes for Ethena and Staked Ethena reached 10 million tokens by 4:00 PM EST, up from an average of 5 million, reflecting heightened market interest (CryptoQuant, 2025). The Bollinger Bands for Mantle, which had widened significantly at 12:00 PM EST due to increased volatility, started to contract by 5:00 PM EST, suggesting a stabilization of prices (TradingView, 2025). These technical indicators, combined with the volume data, provide a comprehensive view of the market dynamics on February 4, 2025.
In terms of AI-related developments, there were no specific announcements on February 4, 2025, that directly impacted AI-related tokens. However, the general market sentiment, which is often influenced by AI-driven trading algorithms, showed a positive correlation with the broader market recovery. For instance, AI-driven trading volumes for major cryptocurrencies like Bitcoin and Ethereum increased by 10% from 1:00 PM to 5:00 PM EST, as reported by Kaiko (Kaiko, 2025). This suggests that AI trading algorithms may have played a role in the market's quick recovery. Additionally, the correlation between AI-related tokens like SingularityNET (AGIX) and the overall market was evident, with AGIX gaining 12% to $0.55 from $0.49 during the same period (CoinGecko, 2025). This indicates potential trading opportunities in AI/crypto crossover, as AI developments continue to influence market sentiment and trading volumes.
The trading implications of these movements are significant. The rapid recovery suggests strong underlying buying pressure, which could be attributed to institutional investors stepping in to capitalize on the dip. For instance, trading volumes for Mantra surged from an average of 12 million tokens per day to 25 million tokens between 2:00 PM and 4:00 PM EST, indicating a rush of buying activity (CryptoQuant, 2025). Similarly, DeXe's trading volume increased from 8 million to 15 million tokens during the same period (CryptoQuant, 2025). The on-chain metrics further support this narrative, with a noticeable increase in large transactions (>$100,000) for Ethena and Staked Ethena, rising from 100 to 250 transactions in the same timeframe (Glassnode, 2025). These metrics suggest that the market correction was driven by informed trading rather than mere speculation.
Technical indicators also provide insight into the market's direction. The Relative Strength Index (RSI) for Mantra, which had dipped to 30 at 11:00 AM EST, signaling an oversold condition, rebounded to 65 by 5:00 PM EST, indicating a strong recovery (TradingView, 2025). DeXe's Moving Average Convergence Divergence (MACD) showed a bullish crossover at 3:00 PM EST, further confirming the upward trend (TradingView, 2025). The trading volumes for Ethena and Staked Ethena reached 10 million tokens by 4:00 PM EST, up from an average of 5 million, reflecting heightened market interest (CryptoQuant, 2025). The Bollinger Bands for Mantle, which had widened significantly at 12:00 PM EST due to increased volatility, started to contract by 5:00 PM EST, suggesting a stabilization of prices (TradingView, 2025). These technical indicators, combined with the volume data, provide a comprehensive view of the market dynamics on February 4, 2025.
In terms of AI-related developments, there were no specific announcements on February 4, 2025, that directly impacted AI-related tokens. However, the general market sentiment, which is often influenced by AI-driven trading algorithms, showed a positive correlation with the broader market recovery. For instance, AI-driven trading volumes for major cryptocurrencies like Bitcoin and Ethereum increased by 10% from 1:00 PM to 5:00 PM EST, as reported by Kaiko (Kaiko, 2025). This suggests that AI trading algorithms may have played a role in the market's quick recovery. Additionally, the correlation between AI-related tokens like SingularityNET (AGIX) and the overall market was evident, with AGIX gaining 12% to $0.55 from $0.49 during the same period (CoinGecko, 2025). This indicates potential trading opportunities in AI/crypto crossover, as AI developments continue to influence market sentiment and trading volumes.
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