Cryptocurrency Market Faces Increased Pressure as Major Tokens Decline
“We expect crypto markets to dip once US markets open,” stated one trader.
What to know:
- Bitcoin and other key cryptocurrencies saw a drastic sell-off, with prices for Bitcoin dropping below $75,000 and major tokens losing approximately 20%.
- XRP, Solana, and Dogecoin witnessed sharp declines, with XRP and SOL decreasing over 20% and breaching critical support levels.
- The market turmoil is attributed to macroeconomic uncertainties, quick liquidations, and recent tariff actions by President Trump, compelling investors to look for safe havens like gold.
The crypto market sell-off intensified during the early European hours, with Bitcoin hitting below $75,000, extending losses across major tokens to nearly 20%.
Tokens like XRP, Solana (SOL), and Dogecoin (DOGE) fell over 5% shortly before the European market opened, leading to a considerable reduction in market capitalization, driven by macroeconomic uncertainties and aggressive liquidations nearing $1 billion.
The broad-based CoinDesk 20 (CD20) index, which tracks the largest tokens, fell by 12%, reflecting a pervasive risk-off sentiment in the sector. XRP and SOL were hit hardest, each plunging more than 20% in the past 24 hours and falling beneath critical support levels. XRP’s trading price at $1.70 has dropped below its critical 200-day moving average, a key technical support level, sparking fears of further decline toward $1.75.
Conversely, SOL dropped below $100, breaking its 50-day moving average and marking a 64% retreat from its all-time peak. Meanwhile, DOGE suffered a 20% plunge to $0.13, as earlier noted by a CoinDesk analysis.
President Trump’s recently imposed 25% tariffs on Canadian and Mexican imports, alongside a 20% levy on China, has led to retaliatory responses.
China is reportedly looking into front-loaded stimulus to mitigate these actions, adding to market tensions, as reported. Investors are turning to safe assets like gold and the Japanese Yen.
Traders predict the market downturn will persist throughout the Asian trading day ahead of the U.S. market opening.
“Historically, crypto markets tend to move before stock markets during weekends, and this morning’s downturn in Asia seems to confirm that expectation,” Jeff Mei, COO at BTSE, conveyed via Telegram. “We expect crypto markets to dip once US markets open."
“Whether or not they recover depends on which major countries can secure short-term tariff delays or agreements this week. Up till now, Vietnam, Cambodia, and Taiwan have committed to reducing their tariffs or increasing US investment in exchange for relief, but we’d need a significant trading partner like Japan or China to engage to restore market confidence,” Mei noted.
Augustine Fan, head of insights at SignalPlus, indicated that the current market conditions exhibit bear market characteristics.
“All indications illustrate that macro markets have entered ‘bear market’ mode, advocating for selling off any rallies, as investors will need to adapt to this new reality compared to their long-term investments,” Fan mentioned in a Telegram message. “The market is likely to cause continued frustration and undermine investor confidence for a considerable time.”
“Over the long haul, analysts suggest that BTC has broken away from global equities and is overdue to align with spot gold; however, the current catalysts seem fleeting, and risk management (e.g., lower prices) is expected to prevail until global market concerns deteriorate,” Fan concluded.
