Tariffs-led risk-off has payments-focused cryptocurrency XRP trading close to the support zone near $2, a crucial level for confirming a significant topping pattern and renewed downtrend.

We are referring to the head-and-shoulders pattern, comprising three peaks, with the middle being the highest. A horizontal line drawn from the base of the three peaks, the neckline, marks the key demand zone.

In XRP’s case, the $1.90-$2 range has been that demand zone since January. So, a price move below the same would trigger the H&S breakdown, confirming a bullish-to-bearish trend change.

A potential breakdown could see prices nearly halve to $1.07, according to veteran analyst and trader Peter Brandt. Chart analysts identify targets using the measure move method, which involves determining the distance from the top of the head to the neckline and subtracting that distance from the breakdown point, in this case, $2.

On the higher side, $3, or the lower high created in early March, is the level to beat for the bulls.

It’s a risk-off day in Asia as traders look to Beijing’s response to U.S. President Donald Trump’s sweeping reciprocal tariffs on China and other Asian nations.

On Wednesday, Trump announced reciprocal tariffs on imports from 180 nations, including higher taxes on trading partners identified as worst offenders, such as China and the European Union.

Trump imposed a new 34% tariff on goods from China in addition to the existing 20% tax, bringing the total levy to 54%, the highest for any nation. Meanwhile, the latest action did not affect Canada and Mexico.

Observers say the ball is now in China’s court, and the nature of its retaliation could determine the market reaction.

«Everything now depends on China. If China devalues the Yuan in response to today’s large, additional US tariffs, that sets off a global risk-off that hits EMs first and then — if it persists — spills back to the US. China has so far kept a very low profile. That may now end,» Robin Brooks, managing director and chief economist at the International Institute of Finance, said on X.

Early Thursday, Beijing urged the U.S. to lift tariffs while vowing retaliation immediately. Meanwhile, the Chinese yuan dropped to a seven-week low of 7 RMB/USD alongside losses in the Asian equities and an impending death cross on bitcoin (BTC).

Letting the yuan depreciate, which makes Chinese goods more attractive in international markets, is one way to counter Trump’s tariffs. That said, it could spell trouble for carry (currency) trades and scare financial markets, as observed in 2015 and 2018.

Besides, potential intervention by the People’s Bank of China (PBoC) to stall a rapid yuan decline can boost the dollar index, inadvertently weighing over risk assets, including stocks and cryptocurrencies.

It’s no coincidence that Asian equities traded in the red at press time, with Japan’s Nikkei hitting an eight-month low. The U.S. stock futures fell over 2%, pointing to risk-off mode.

Bitcoin (BTC), the leading cryptocurrency by market value, traded near $83,300, having dropped from $88,000 to $82,500 following Trump’s tariffs announcement, according to CoinDesk market data.

The 50-day simple moving average (SMA) of the cryptocurrency’s spot price appears on track to cross below its 200-day SMA, confirming what is known as the «death cross» bearish technical pattern.

Though it has a mixed record of predicting price trends, the latest cross happening against the backdrop of escalating trade tensions warrants attention – more so, as options pricing now shows bias for puts or downside protection out to the June end expiry, according to Deribit and Amberdata.

U.S. stablecoin legislation took another major step on Wednesday as a House of Representatives committee joined Senate counterparts in advancing a bill to be considered by the overall House, bringing stablecoin regulations closer to reality.

Eventual approvals in both the overall House and Senate would let lawmakers start melding the two versions into a unified piece of legislation that could get a final nod. Republican lawmakers and President Donald Trump have aimed toward an August goal in getting the effort completed.

Though the crypto industry and their most reliable Republican allies in Congress were happy to welcome many Democrats to the yes side on moving the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE Act) out of the House Financial Services Committee on Wednesday, the Democrats on the panel consistently raised concerns about Trump’s connections to the industry and stablecoins. Still, five Democrats joined 27 Republicans on the committee to advance the bill after a marathon markup session.

A week before the House committee focused on the bill in Wednesday’s markup — a session in which lawmakers make changes and debate amendments on legislation — the Trump-tied World Liberty Financial (WLFI) announced it’s supporting its own stablecoin (USD1). Trump has been highly active in crypto, including in selling non-fungible tokens (NFTs) and memecoin $TRUMP, even as he pushes for crypto-friendly policies at the federal level.

U.S. regulation of stablecoins — generally dollar-tied tokens, such as Tether’s USDT and Circle’s USDC — is one of the two top policy priorities for the industry. And committee Chairman French Hill argued on the industry’s behalf that «innovation needs guardrails, not roadblocks.»

Republican members declined to discuss President Trump’s industry involvement in any explicit terms. When Waters and other Democrats pushed amendments to block the potential conflicts raised by the president’s business interests and his direct authority over regulators who would make decisions about stablecoins, they were rejected by the panel’s Republicans, who repeatedly called such protections «unnecessary.»

«We don’t discriminate on entrepreneurs based on who they are and where they come from,» Hill said. If the government wants clear guardrails around this space, he repeatedly argued, the best move is to pass the bill that establishes oversight.

Representative Maxine Waters, the senior Democrat on the panel, said that Trump «leveraged the power of the presidency to establish multiple crypto schemes to enrich himself and his family,» calling it a «display of greed.»

«He’s unlike any other issuer, because he’s the president of the United States,» said Representative Stephen Lynch, the ranking Democrat on the panel’s digital assets subcommittee, who argued Trump would be in a position to sign off on any government help needed by his own business interests were they to fail. «If this was a Democratic president who was trying to do this, the Republicans’ hair would be on fire, and rightly so. This should not be happening.»

Another Democrat, Illinois Representative Sean Castin, argued that Tron’s Justin Sun has put tens of millions of dollars into WLFI for no clear return other than its relationship to the Trump family. He contended that government officials tied to stablecoins could be influenced by foreign investors in a way that’s hidden from public scrutiny.

The Democratic arguments failed to move the committee’s Republican majority, so no new amendments stuck to the effort. Supporters have said this House version is largely parallel to the Senate’s. Representative Bill Huizenga, a Michigan Republican, said the House version properly maintains sufficient authority in the hands of state regulators, which offers a «lighter touch, at times.»

«We have an administration that is ready to embrace these products, and the time is now,» Huizenga said.

This was one of a few bills before the House Financial Services Committee dealing with crypto-tied topics. Another piece of legislation debated on Wednesday was one that would form a cross-government group of law-enforcement agencies to address illicit crypto use and another that would ban U.S.-issued central bank digital currency (CBDC). Lawmakers also voted on dozens of amendments to the stablecoin bill before voting to advance the bill itself, prompting Rep. Lynch to joke that the panel may have set a record for the most failed votes in a row.

The cross-government bill, the Financial Technology Protection Act, passed with unanimous support, 49-0. The anti-CBDC bill passed with 27 votes, with 22 lawmakers voting against.

Though lawmakers initially had issues with their electronic voting system, they began making good time after starting votes near 10:30 p.m. ET – nearly 12.5 hours after the markup began. Voting on all five bills wrapped up by 11:15 p.m. ET.

As the stablecoin bill continues to move forward, Trump is also poised to sign the first pro-crypto congressional action: a resolution that erases an Internal Revenue Service rule that targeted decentralized finance (DeFi) operations. The president is expected to sign the resolution, though he hasn’t announced a schedule to do so.

UPDATE (March 3, 2025, 01:15 UTC): Adds vote totals.