Crypto Starts February on the Back Foot as Markets React to Tariffs

Despite January closing on a positive note and proving to be a strong month for Bitcoin, the past 24 hours have delivered poor price action following what initially appeared to be a promising start to February. In the last six hours alone, Bitcoin has dropped over 4%, falling back to just above $102K.

Some are attributing this sudden correction to the White House’s recent confirmation that 25% tariffs on Canada and Mexico, along with 10% tariffs on China, will go into effect on February 1. Many economic analysts remain highly sceptical about the tariffs, arguing that they will provide no benefit and actually hinder everyday Americans. Since the confirmation was made in the early hours of the morning, all major markets have declined. Both the S&P 500 and Nasdaq have fallen, triggering a domino effect across the crypto markets, with Bitcoin and most altcoins following suit. Even traditional ‘safe havens’ like gold have taken a hit, while the US dollar has strengthened, indicating broader risk-off sentiment.

Despite the broader bearish trend in crypto, two major projects have stood out—not only outperforming Bitcoin and most other cryptocurrencies but also managing to close the day with solid gains. These are Ethereum (ETH) and Sonic (S). Over the last two days, Ethereum has outperformed Bitcoin by nearly 8%, providing the first glimmer of hope for ETH bulls. Meanwhile, despite weak price action following the Fantom-to-Sonic migration, Sonic has begun to show some positive signs, gaining 30% in just two days.

That being said, Bitcoin remains the key driver of the market, still locked in the $100K–$109.9K range that it has occupied for the past couple of weeks. Will February finally break this prolonged consolidation, or is it time for Ethereum to take the lead?

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