In the last 24 hours, the cryptocurrency market has experienced a sharp downturn, losing nearly $980 million in value as escalating US tariff wars create economic turbulence. The market, which had been buoyed by President Trump’s US Crypto Strategic Reserve announcement, saw gains erased and a significant drop of over 14.7%, settling at $2.64 trillion on March 4.
Bitcoin, the leading cryptocurrency that represents about 60% of the market, registered a notable decline of 8.80% within this period. The introduction of US tariffs against nations like Mexico, China, and Canada on March 4 prompted retaliatory measures that increased global economic uncertainty, leading investors to pull back.
Stock market indices reflected similar downturns: the S&P 500 fell by 1.76%, the Nasdaq dropped 2.64%, and the Dow Jones had a second consecutive day of losses, declining by 1.48%. Analysts note the correlation between cryptocurrencies and US tech stocks, suggesting Bitcoin’s future recovery is heavily dependent on the Nasdaq’s performance.
Moreover, the market has witnessed massive liquidations totaling $977.80 million, predominately affecting long positions. Bitcoin and Ethereum saw liquidations of $370.52 million and $193.73 million respectively. Such liquidations inherently increase supply, driving prices further down.
Technically, the crypto market’s decline is seen as part of a correction pattern following failures to break above critical resistance levels like the 200-4H EMA. The rejection at these levels has signaled strong selling sentiment and further bear market control.
On a broader scale, the market appears to be following a descending triangle pattern, a bearish sign indicating sustained pressure, with potential further declines. The current breakdown stage suggests an eye toward $2.47 trillion, while persistence in selling could push it down to the 200-week EMA at approximately $1.76 trillion. Nonetheless, holding the 50-week EMA might allow for some recovery.
This market analysis highlights the risks inherent in cryptocurrency investments amidst global economic uncertainties, emphasizing the need for investors to conduct thorough research.
