Bitcoin and the broader crypto market are under great pressure as macroeconomic concerns fuel investor anxiety.
In the last 24 hours, BTC prices fell 2.2%, briefly touching on $76,624 before recovering to $81,376 at press time.
Ethereum (ETH), the second largest cryptocurrency by market capitalization, also fell 10% to $1,760, at its lowest level since November 2023. At the time of writing, ETH has recovered to over $1,900.
Other key assets, including Solana (SOL), XRP, Cardano (ADA), Dogecoin (Doge) and Binance Coin (BNB), each recorded significant losses of over 4% during the reporting period.
Coinglass data showed that the sale caused a surge in liquidation, losing 321,000 traders totalling $906 million.
Data shows that long-standing traders suffered the most on betting on further price increases, sweeping $732.2 million and short positions accounted for $173 million.
Why did the market crash?
Macroeconomic uncertainty appears to be a major factor in the market slump, but this has had a widespread impact.
Bitcoin analyst Fred Kruger attributes the charge to the fear of a recession.
“The reason Bitcoin is down is simple: fear of recession.”
Over the weekend, US President Donald Trump did not dismiss the possibility of a recession, raising new concerns across financial markets.
Analysts at Kobeissi Letter highlighted the ripple effects of Trump’s statement, noting that tech stocks suffered sharp losses. The NASDAQ 100 has been approaching the bare market territory at the fastest pace since the March 2020 crash, down 12.4% in 13 trading sessions.
Analysts continued that cryptocurrency is not spared. Since peaking on December 17th, the market has cut $1.3 trillion, a 35% decline over the past three months, indicating a deeper correction.
However, the market remains vulnerable to further declines, with no clear catalysts to promote reversal.
Bitmex co-founder Arthur Hayes suggested that Bitcoin could find a bottom of around $70,000, showing a 36% drop from its peak of $110,000. However, he noted that such modifications are common in bull markets.
Nevertheless, he pointed it out:
“Traders will try to buy dip if it’s more risk-averse for the central bank to deploy more capital. They may not be able to grasp the bottom, but they don’t have to suffer mentally through long-term lateral orientation or potential unrealized losses.”
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(TagStoTRASSLATE) Bitcoin (T) US (T) Analysis (T) Crypto (T) Macro
