After two days of intense selling pressure and record liquidation levels, the crypto market staged a strong rebound on Monday as the United States and Mexico agreed to a one-month pause on tariff threats.
President Donald Trump announced the temporary truce following a conversation with Mexican President Claudia Sheinbaum, during which Mexico agreed to deploy 10,000 soldiers to its northern border to curb the flow of fentanyl and illegal migration. In return, the two leaders agreed to halt the implementation of new tariffs while negotiations take place between U.S. and Mexican officials.
The decision provided immediate relief to financial markets, which had been in turmoil since Trump’s executive order on Saturday imposing 25% tariffs on Canadian and Mexican imports — along with additional tariffs on Canadian energy and Chinese goods.
Markets React: Bitcoin, Solana, and Ether Rebound
The crypto market, which had experienced a massive downturn overnight, bounced back significantly after the tariff pause was announced.
- Bitcoin (BTC) fell below $93,000 at its lowest point but rebounded to $99,500, marking a 6.87% gain from its session low.
- Ether (ETH), which had collapsed over 35%, pared most of its losses and climbed back toward the $2,700 level.
- Solana (SOL), down 24% earlier in the day, rebounded 2% to $207.57.
- XRP and Sui (SUI) saw some of the most dramatic recoveries, bouncing nearly 50% from their overnight lows.
Bybit CEO Ben Zhou estimated that total crypto liquidations over the past day were in the range of $8–10 billion, highlighting the scale of the market turbulence.
Crypto’s Short-Term Volatility vs. Long-Term Value
Market analysts note that Bitcoin’s long-term value proposition remains intact, despite its short-term correlation with risk assets.
“If tariffs mean a stronger dollar, higher inflation, and reduced prospects of rate cuts, it translates to lower global liquidity for risk-on assets like crypto,” analysts at Bernstein wrote in a note to clients on Monday.
However, they pointed out that over longer timeframes, as governments take on higher debt and deficits, leading to monetary debasement, Bitcoin historically holds its relative value to the dollar.
What’s Next for Crypto?
While the pause on tariff threats has brought temporary relief, markets remain highly sensitive to ongoing trade negotiations. Should tensions flare up again, crypto and other risk assets may face renewed volatility.
For now, traders and investors are closely watching:
- U.S.-Mexico trade talks, set to be led by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Commerce Secretary Howard Lutnick.
- Potential new trade developments with Canada, as Prime Minister Justin Trudeau and President Trump are set for a second round of discussions.
- The strength of the U.S. dollar, which has a direct impact on liquidity flows into Bitcoin and other digital assets.
While short-term uncertainty remains, Bitcoin’s long-term fundamentals continue to attract investors, particularly as traditional economies navigate inflation, trade wars, and monetary policy shifts.
Conclusion
The crypto market rebound following the tariff pause demonstrates how macroeconomic events can impact digital assets in the short term. While Bitcoin and major altcoins have shown resilience, the market remains highly reactive to geopolitical developments.
With negotiations ongoing and global trade uncertainty still looming, traders should brace for continued volatility while keeping an eye on key support and resistance levels.