XRP and Dogecoin Jumped 20% Before Crashing Again

XRP and Dogecoin jumped 20% before crashing again as rising tensions between the U.S. and China rattled the crypto market. Bitcoin briefly crossed $100K

The U.S. and China's trade war has spilled over into the crypto market, causing massive price swings for Bitcoin, XRP, and Dogecoin.

After President Trump's decision to pause tariffs on Mexico and Canada briefly pushed Bitcoin to the $100K level, China's retaliatory tariffs drove the flagship coin down to $98K.

Even though crypto is often described as decentralized, it still reacts to events in the traditional financial markets. Many believe this conflict isn't just about trade - it's about control over global finance and supply chains. If the U.S. keeps escalating tensions, China may speed up efforts to move away from the dollar, push its central bank digital currency (CBDC), and tighten its grip on key industries.

A Wild Ride for XRP and Dogecoin

Crypto traders banded together to buy the dip after Monday’s $2.2 billion liquidation event, swarming XRP and Dogecoin with bids. However, those gains were quickly wiped out when China retaliated with new tariffs on U.S. goods.

After a 17% drop on Monday following a massive liquidation on BitMEX, Bitcoin (BTC) rebounded to reach $98,000 on Tuesday morning.

The recovery came after President Trump's decision to pause tariffs on Mexico and Canada sparked market optimism.

However, those gains were largely erased by Tuesday evening as China announced retaliatory tariffs on U.S. imports.

According to Ben El-Baz, Managing Director of HashKey Global, the trade war could weaken investor confidence and slow down the crypto bull market.

However, El-Baz believes the impact on the crypto market will be limited if the U.S. introduces more crypto-friendly policies.

"The U.S. is lagging behind in the CBDC race, and China is already testing its digital yuan in multiple cities," he added.

El-Baz's comments come amid a period of heightened volatility in the crypto market.

On Monday, crypto prices tumbled sharply following a massive liquidation event on BitMEX, which saw about $2.2 billion in positions liquidated within an hour.

The liquidation cascade began with BTC futures on BitMEX, where a single trader lost over $500 million in a single trade.

The sell-off flowed into other markets, including other futures and spot exchanges, as well as DeFi protocols.

As a result, BTC price dropped from the $100,000 level to below $90,000, while altcoins like XRP, Solana (SOL), and Cardano (ADA) saw triple-digit percentage drops.

Despite the recent sell-off, analysts at Prestro Research believe that Bitcoin is still in a bull market, and the recent price decline is a natural reaction to the overheated market.

"Many analysts have pointed out that Bitcoin is often called 'digital gold' but acts more like a risky asset," said Min Jung, an analyst at Prestro Research.

"This means that global events like China's tariffs affect it much like traditional stocks, putting short-term pressure on the price."

Jung called the recent sell-off an overreaction and advised traders to stay prepared for more volatility.

The big question is whether this is just a negotiation tactic or the start of a long economic battle. If tensions continue to rise, crypto markets could face deeper pullbacks.

Can the Crypto Tokens Recover?

For now, XRP and Dogecoin are at the mercy of global market uncertainty.

Crypto analyst CasiTrades pointed out that XRP plunged to $1.77 after a weekend liquidation event wiped out key support levels.

Currently in a Wave 4 recovery, XRP is testing resistance at $2.49 and $2.67.

A break above $2.67 could spark a strong rally, but if it fails, XRP may drop back to $1.53.

CasiTrades believes that once a bottom is confirmed, XRP could surge past its all-time high of $3.80.

Meanwhile, Dogecoin is also showing signs of a possible rebound. It recently bounced off key support near the 200-day simple moving average (SMA) at $0.2265.

With the relative strength index (RSI) nearing oversold levels, DOGE could see a short-term recovery if buyers step in.

If the trade war drags on, crypto investors may remain cautious, leading to more extreme price swings. Keep your eyes open!