The cryptocurrency market has experienced a significant downturn as investors respond to a combination of factors, including outflows from crypto funds and policies implemented by President Donald Trump. Over the past week, the market has declined by 14.7%, dropping to a total value of $2.7 trillion as of March 10. This decline follows a previous surge following President Trump’s announcement of a US Crypto Strategic Reserve.
Among the contributing factors, President Trump’s recent acknowledgment that his economic policies might cause short-term disruptions has dampened investor enthusiasm. Bitcoin has decreased by 4%, while Ether has dropped by 3.2% to a value above $2,000. Solana and XRP have also faced losses, declining by 7.2% and 4.5%, respectively.
Adding to the market’s woes are significant liquidations in the derivatives sector. In the past 24 hours, $650.80 million in liquidations have been recorded, with long positions particularly impacted, accounting for $595.75 million of the total. Bitcoin and Ethereum have been the largest sufferers in this scenario, with liquidations amounting to $264.22 million and $114.76 million, respectively.
President Trump’s policies, including trade tariffs and fiscal plans, are expected to result in market fluctuations. He stated that such measures are part of a long-term strategy despite potential short-term disruptions. This acknowledgment of economic turmoil has curbed the optimism surrounding a deregulated, crypto-friendly government post-election.
Moreover, investors are currently pulling back on cryptocurrency investments, evidenced by the fourth consecutive week of outflows from crypto investment products, totaling $876 million in the week ending March 7. Over the past four weeks, these outflows have reached $4.75 billion, reducing the year’s inflows to $2.6 billion. Bitcoin, in particular, has seen significant outflows totaling $756 million. Consequently, the total assets under management have dropped by $39 billion from the previous high to its lowest point since November 2024, standing at $142 billion.
This decline is reflected in the Crypto Fear & Greed Index, which fell to 10 on March 10, signaling “extreme fear” among investors. The market continues to follow a technical correction trend, with the total capitalization falling below the descending triangle pattern.
The pattern, characterized by lower highs and a flat support level, indicates further potential downturns should the current support levels fail. The market may target the 100-week simple moving average at $2 trillion if seller pressure continues, although support at $2.6 trillion could trigger a rebound.
This current situation highlights the necessity for investors to conduct thorough research and exercise caution in their decision-making processes.
