Swyftx Squawk 🦜 Markets Tumble and Tariffs Return

It’s been a heavy week in crypto. We talked about how in the middle the market seemed last week and how it was poised to make a move in either direction. It seems, for now, the market picked ‘lower’.  

In today’s write up we'll explore some of the big changes that might be on the minds of investors and traders pushing this downtrend – and what could come next.  

One key theme rings true more than ever: It’s not all about what’s happening in crypto that ends up moving crypto. 

The Return of the Tarriff 

It’s the first time in a few months we’ve seen the ‘T’ word become headline-worthy again. As we saw through 2025, this was a narrative that impacted the market for quite some time. A big takeaway of this word coming back into the fray is the additional friction it may apply to already heightened stakes on the global front.  

Now, I’m not going to pretend to be a political expert by any means, but the rising tensions between the US, Greenland and Europe now has another variable to deal with – potential economic ramifications stemming from the US side.  

What interests me is how these developments are impacting trade and investor sentiment. Will the market think of this as a classic leaf out of Trump’s playbook and (largely) ignore it, or will this move further inflame the situation? How would the market respond to either of these outcomes?  

We haven’t had to wait too long through the week to see some of Trump’s proposed tariffs already walked back.  

While we take a breath and see how diplomacy proceeds from here, the market’s response will be key to watch.  

Markets move on expectations. And when expectations shift, behaviour follows and we get an understanding of how confident the market is for a move higher or lower.  

This is another quiet reminder that the macro backdrop might continue to remain more complicated than just positive or negative economic data releases.  

Chart of the week: Euphoria/Despair Index 

This is my Crypto Euphoria Index, a way of visualising global measures of volatility, momentum, futures markets, stablecoin dominance and altcoin appetite within the crypto market. Simply, this chart helps inform us whether market sentiment is in a state of Euphoria and pushing its luck (when it moves to the green half) or Despair (red half), historically signalling overselling. As always, single data points shouldn’t be used as a reliable indicator and aren’t indicative of future performance – but they can give us useful insights.  

Looking at the market’s dynamics, this recent patch of price action has taken some wind out of the sails. After a positive start to the year, the recent geopolitical uncertainty may have led us to a point where, if there aren’t enough reasons for the market to regain its confidence, we could see this slump continue.  

While the past is no guarantee of what we should expect next, this current period does closely resemble the pattern post-euphoria we saw around June to July 2024. This was a duration categorised by relatively bearish conditions, with lower volumes and retail interest. 

Will this time be different?  

Catch you all again next week.