The crypto market faced a turbulent week, driven primarily by:
- U.S. Bitcoin strategic reserve creation (March 7).
- New Donald Trump’s tariffs (March 10-11)
- U.S. inflation data (March 12)
This article examines the key shifts in market behavior amid these events, focusing on trading volume distribution and capital rotation trends.
A Flee to the U.S. Dollar
On March 10 and 11, stablecoins’ share of trading volume experienced heightened fluctuations as a new wave of tariffs hit the market. The initial reaction was a flight to the U.S. dollar, with USD-related pairs temporarily doubling their share in trading volume, reaching 21% in a combined volume with USD-backed stablecoins.
USD-backed stablecoins even saw a slight supply decrease on March 10, suggesting that some market participants had exited the market. However, in the following days, stablecoins quickly regained their dominance, climbing back to a 92% share in combined trading volume, as capital rotated into USDT and USDC.
Bitcoin, on the other hand, briefly benefited from this turbulence. It saw a modest increase in both market cap and trading volume during key events — Monday’s tariff-driven uncertainty and Wednesday’s U.S. inflation data release. This highlights Bitcoin’s perceived role as a safe haven among altcoin holders during periods of economic uncertainty.
Potential Tariff Impact Weakening
Although the new tariffs wiped out nearly $300 billion in total market cap within a week, their impact on crypto trading volume was relatively subdued. The market saw a brief 2.5x surge in volume on Monday and Tuesday. For comparison, previous tariffs imposed on Canada, Mexico, and China in early February triggered a 4x volume spike, while EU-focused tariffs led to a 3x increase.
Despite this short-lived boost, overall crypto trading volume remained in a downtrend, recording a 7% weekly drop, with Bitcoin (-23%) and stablecoins (-19%) being the primary contributors. This decline underscores reduced liquidity and weaker capital flows.
A Runaway from Ether
Among top altcoins, Ether saw the most significant capital outflows relative to its size. Its trading volume share jumped from 13% to 22% within a week, while its market cap dominance declined from 8.70% to 8.15%. This divergence suggests that traders were actively rotating out of ETH, primarily in favor of fiat, stablecoins, and Bitcoin.
Furthermore, Ethereum’s 2% market depth shrank by 14% over the week, reflecting a more fragile order book and an increasing risk of price volatility.
However, as overall market activity declined, trading volume became more concentrated on Bitcoin and Ether. This suggests that while capital fled from many altcoins, traders continued engaging with ETH — albeit in a more volatile and less liquid environment — reinforcing its role as a core trading asset alongside Bitcoin.
TRUMP Dominance Reached New All-Time Low
Despite a week dominated by Trump-related events, the market has shown little interest in the TRUMP token. Once a major speculative asset, the token briefly commanded 10% of the entire crypto trading volume on Donald Trump’s inauguration day. However, its relevance has since faded, with its trading volume share recently plunging to a new all-time low of 0.51%.
This sharp decline suggests waning speculative enthusiasm and diminishing liquidity, potentially limiting the token’s ability to stage a meaningful recovery unless a new catalyst reignites interest.
