The cryptocurrency market experienced a significant downturn on Friday, erasing most of the gains achieved earlier in the week. Bitcoin, which had been trading near $88,000, plummeted to $83,800—a 3.8% drop within 24 hours. Major altcoins such as Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) suffered losses of nearly 10%. Overall, the market lost approximately $115 billion in value, according to recent data.
Ethereum faced an even steeper decline, falling over 6% and reaching its lowest price against Bitcoin since May 2020. While Bitcoin ETFs have attracted more than $1 billion in inflows over the past two weeks, Ethereum ETFs have seen no new investments since early March. This lack of demand has raised concerns about Ethereum’s competitiveness relative to Bitcoin.
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Stock Market Decline Intensifies Crypto Selloff
The downturn wasn’t limited to cryptocurrencies—U.S. stock markets also stumbled following weak economic data. The S&P 500 dropped 2%, and the Nasdaq fell 2.8%. Crypto-related stocks endured heavier losses, with MicroStrategy (MSTR), the largest corporate Bitcoin holder, declining 10% and Coinbase (COIN) slipping 7.7%.
Recent inflation reports revealed a 2.5% year-over-year price increase, with core inflation slightly exceeding expectations at 2.8%. Consumer spending grew by just 0.4%, indicating sluggish economic growth. The Federal Reserve’s GDPNow model predicts a potential 2.8% contraction in the U.S. economy for Q1, fueling fears of stagflation. Additionally, new U.S. tariffs set to生效 on April 2 have compounded market uncertainty.
Bitcoin’s Decline Was Predicted—But How Low Could It Go?
Bitcoin’s fall to $84,000 aligned with trader expectations, as the CME futures gap from earlier in the week suggested a pullback was likely. Historically, Bitcoin retraces such gaps, making this correction predictable. However, Bitcoin’s price remains closely tied to the Nasdaq; if U.S. stocks continue to decline, cryptocurrencies could face further losses.
Despite the drop, analytics firm Santiment noted that Bitcoin still posted a slight weekly gain, stabilizing around $84,300. While global stocks faltered due to inflation and tariff concerns, Bitcoin’s modest rebound after market close hints at a potential decoupling from its historical correlation with equities.
📊 Key Insight: Price correlation shifts can be subtle. The S&P 500 and global markets have been heavily impacted by tariffs and inflation fears.
Bitcoin, however, remains up 0.4% this week, trading at $84,300 at the time of writing.
This contrasts sharply with 2022, when Bitcoin closely mirrored stock market trends.
Expert Predictions: What’s Next for Bitcoin?
Short-term uncertainty lingers, but some analysts highlight long-term positives. Joel Kruger, a strategist at LMAX Group, emphasized growing crypto adoption, with major financial institutions deepening their involvement. He suggests that while Bitcoin may see further dips, strong support between $70,000 and $75,000 could pave the way for a recovery later this year.
Bearish Outlook
Crypto analyst Michaël van de Poppe warns that Bitcoin is losing momentum, with critical liquidity levels below $84,000 at risk. A breakdown of this support could trigger additional declines. He anticipates another week of downward movement before a potential Q2 rebound.
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FAQs
Why is the crypto market down today?
Weak U.S. economic data, rising inflation, and impending tariffs triggered a broad selloff across crypto and stock markets.
How does Ethereum’s performance compare to Bitcoin’s?
Ethereum has underperformed Bitcoin, hitting a 4-year low against BTC due to stagnant ETF inflows and weaker demand.
Could Bitcoin drop further?
Yes, if it breaks key support levels below $84,000, additional declines are possible. However, long-term recovery prospects remain strong.
What’s driving the correlation between crypto and stocks?
Macroeconomic factors like inflation and policy changes often impact both markets simultaneously, though recent trends suggest a possible decoupling.
How can investors navigate this volatility?
Diversifying portfolios, monitoring macroeconomic indicators, and setting strategic entry/exit points can help manage risk.
Will Ethereum ETFs regain traction?
Current demand for Ethereum ETFs is low, but regulatory developments or institutional interest could revive inflows.
History shows Bitcoin thrives on comebacks, but for now, traders are watching to see if it stabilizes or faces further declines.
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