The cryptocurrency market has taken a hit, with Bitcoin falling below the $80,000 level as investors prepare for more financial market volatility. The decline comes after U.S. equities suffered their worst drop since 2020 following the rollout of President Donald Trump’s restrictive global tariffs.
Current Market Situation
As of the latest update, Bitcoin’s price has plummeted by over 2% to 77,744.51, as reported by Coin Metrics. Although it has rebounded slightly from its earlier low of 74,420.69, it remains significantly down from its Friday high of nearly $85,000. Furthermore, Bitcoin’s current value is approximately 30% below its peak in January, marking a substantial decline.
Other Cryptocurrencies Follow Suit
The downturn in the cryptocurrency market is not limited to Bitcoin, as other major players have also experienced significant losses. Specifically, Ether has extended its two-day losses to 12%, while the token tied to Solana has seen its losses reach 11% over the same period. These declines suggest a broader market trend, with investors becoming increasingly cautious and selling off their holdings in response to the current economic uncertainty.
Investor Sentiment
The market downturn has triggered a wave of long liquidations, with traders betting on an increase in Bitcoin’s price being forced to sell their assets to cover their losses. In the past 24 hours, Bitcoin has seen over 438 million in long liquidations, according to CoinGlass. Ether has also seen 438 million in long liquidations during the same period.
Expert Insights
Will Clemente, an independent investor and previous co-founder of Reflexivity Research, believes that while Bitcoin may be closer to the end of its correction, the window of uncertainty has only widened for markets over the last few weeks. “Bitcoin is not immune when people need to sell what they can for posting margin or internal risk models,” he said.
Clemente also noted that Bitcoin has traded above $80,000 for most of the year, but its relative strength towards the back half of last week appeared to be just a lag behind equities. “Should equities get relief, Bitcoin will likely follow as well,” he added.
Critical Support Level
The ongoing market turmoil has led Bitcoin to test the critical 74,000 level, which marks its 2024 peak as a potential low. Joel Kruger, market strategist at LMAX, told CNBC that investors are closely watching this level. Tracy Jin, chief operating officer of the crypto exchange MEXC, warned that Bitcoin could still fall as low as 68,000.
Long-Term Outlook
Some experts believe Bitcoin’s long-term prospects remain optimistic despite market volatility. Clemente noted that deglobalization and rising geopolitical tensions should benefit a “decentralized, open source, neutral, scarce reserve asset like Bitcoin.” Similarly, Standard Chartered’s head of digital assets, Geoff Kendrick, said that Bitcoin “will become a hedge against tariff risks this time” and that “U.S. isolationism is akin to increased risks of holding fiat, which will ultimately benefit Bitcoin.”
Conclusion
The current market situation is uncertain, and investors are bracing for more volatility. However, with its potential as a hedge against tariff risks and its long-term prospects, Bitcoin remains a closely watched asset in the cryptocurrency market. Seeing how Bitcoin and other cryptocurrencies respond to the ongoing global economic uncertainty will be interesting as the market evolves.