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Crypto Liquidation Impact: Stocks, Gold, and Digital Assets Crash!

Published by
Vignesh S G

In a rare and dramatic turn, global markets are seeing a massive selloff across all major asset classes — from stocks and oil to even gold. Experts are calling it a “rush to the exit” as investors scramble to move their money into cash. What’s driving this sudden wave of panic? And more importantly, why are even traditionally safe assets crashing alongside riskier ones?

With cryptocurrencies also tumbling by 5.4% in just 24 hours, everyone is panicking. Let’s understand the changes.

What’s Happening Across Asset Classes?

US President Donald Trump aggressive tariff policies have triggered widespread market uncertainty, affecting major economies around the world. Unlike previous downturns, this time even traditional “safe” assets are feeling the heat.

Yesterday, the S&P 500 — one of the top U.S. stock indexes — fell more than 4.03%. Meanwhile, the Nasdaq 100, which is heavily weighted toward tech stocks, dropped by 5.23%. These are significant single-day losses, highlighting just how nervous investors have become.

At the beginning of the month, WTI Crude Oil was trading at around $71.34 per barrel. Since then, it has plunged by 18.76%, reflecting falling demand and broader market fears.

Gold, which is usually seen as a safe haven during market turmoil, has also been affected. Over the same period, gold prices have dropped by 2.48%, showing that investors are selling off nearly everything to raise cash.

What’s Different: Everything’s Falling at Once

Normally, when stock markets drop, investors move their money into safer assets like gold. But this time, everything is falling together — a rare and worrying sign.

According to analyst Adam Kobeissi, investors are liquidating all kinds of assets in order to hold cash. This typically happens only in moments of serious panic or deep uncertainty.

The CNN Fear and Greed Index — a key measure of investor sentiment — is now at just 4. This level reflects extreme fear and uncertainty in the market.

What This Great Liquidation Means for the Crypto Market

The cryptocurrency market has also taken a hit, falling 5.4% in just 24 hours. Most top coins are in the red:

  • Bitcoin (BTC): down 2.6%
  • Ethereum (ETH): down 6.5%
  • XRP: down 2.0%
  • BNB: down 0.9%
  • Solana (SOL): down 1.5%
  • Dogecoin (DOGE): down 1.9%

However, there’s a silver lining. Despite the drop, the overall crypto market cap is 1.25% higher than it was at the start of the day. Altcoins are showing particular strength:

  • The market cap excluding Bitcoin has risen from $875.85B to $884.44B.
  • The market cap excluding the top 10 cryptos has increased from $188.51B to $192.9B.

This suggests some investors are still actively buying, especially in smaller coins.

The current wave of selling has hit every corner of the financial world — and crypto hasn’t been spared. But the rise in altcoin market caps suggests some traders may be preparing for a bounce.

As fear spreads and even gold loses ground, the question remains: can crypto serve as a safe haven in times like these, or is it still just another risky asset? The coming days may reveal the answer.

FAQs

How is the cryptocurrency market reacting to the global selloff?

Crypto has dropped 5.4% in 24 hours, but altcoin market cap is rising, hinting at selective buying despite market-wide fear.

Is this a good time to invest in cryptocurrency?

Sharp declines signal risk, yet rising altcoin caps suggest a potential entry point for bold investors.

Vignesh S G

Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

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