Funding Rates Tumble as Market Awaits Upheaval

The cryptocurrency market is signaling several warning signs. On April 4, funding rates across leading exchanges dropped below 0.005%, reflecting high risk aversion. This comes as the world’s highest trade tensions ratcheted up after the declaration by former U.S. President Donald Trump of drastic new tariffs. Lower funding levels confirm that investors are not willing to hold leveraged positions, typically due to bearish sentiment . A 42% drop in liquidation levels also reflects weaker market activity in comparison to the strength. Trading Volumes Plummet as Investors Pull Back In the past 24 hours, crypto trading volumes have reduced by 22.71%, falling to $247.6 billion. The sharp decline confirms that traders are hedging or exiting the market in general to prepare for volatility. The decline follows Trump’s April 2 tariff threat, which involves a blanket tariff of 10% on all foreign imports and up to 34% for some countries like China. Bitcoin Nears a Death Cross Bitcoin dropped to $81,000 after the announcement and is showing additional weakness. Technical analysts are keeping a close eye on BTC’s 50-day moving average, which is moving toward a crossover below its 200-day average—a classic “death cross” indicator. This type of formation tends to produce sharp price declines and is considered a bearish market indicator. Fear Index Confirms Pessimism The crypto fear and greed index is at 25, in the “extreme fear” range. This reflects investors becoming more risk-averse and uncertain about near-term outlooks. Trade War Fallout Spills Over Into Crypto The repercussions of Trump’s tariffs are not limited to crypto. Global equities markets are also declining, while governments like China and the EU are setting up retaliatory trade measures. With inflation risks rising and recession fears intensifying