
The crypto market experienced a sharp downturn, losing $115 billion in value, with Bitcoin and major altcoins crashing.
Ethereum's performance lagged behind Bitcoin, facing weak ETF inflows and hitting multi-year lows against BTC.
Despite short-term volatility and potential further drops, experts anticipate long-term growth in crypto adoption and potential recovery.
The crypto market took a sharp hit on Friday, wiping out most of the gains from earlier in the week. Bitcoin, which was trading close to $88,000, plunged to $83,800โfalling 3.8% in just 24 hours. Major altcoins like Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) dropped nearly 10%. In total, the market lost about $115 billion in value, according to market data.
Ethereum also saw a steep decline, falling over 6% and reaching its weakest price against Bitcoin since May 2020. While Bitcoin ETFs have attracted over $1 billion in inflows in the past two weeks, Ethereum ETFs havenโt seen any new investments since early March. This lack of demand is raising concerns about Ethereumโs performance compared to Bitcoin.
Stock Market Decline Adds to Crypto Selloff
It wasnโt just crypto that sufferedโU.S. stock markets also took a hit after weak economic data was released. The S&P 500 dropped 2%, while the Nasdaq fell 2.8%. Crypto-related stocks faced even bigger losses, with Strategy (MSTR), the largest corporate Bitcoin holder, falling 10% and Coinbase (COIN) dropping 7.7%.
The latest inflation report showed a 2.5% year-over-year increase in prices, with core inflation at 2.8%, slightly higher than expected. Consumer spending rose only 0.4%, signaling slow economic growth. The Federal Reserveโs GDPNow model now predicts the U.S. economy could shrink by 2.8% in Q1, raising fears of stagflation. On top of that, new U.S. tariffs set to take effect on April 2 have added to market uncertainty.
Bitcoinโs Drop Was ExpectedโBut Could It Fall Further?
Bitcoinโs decline to $84,000 wasnโt surprising, as traders anticipated a pullback due to the CME futures gap from earlier this week. Historically, Bitcoin tends to revisit these price gaps, making this correction likely. However, Bitcoinโs price is closely tied to the Nasdaq, meaning if U.S. stocks continue to slide, crypto could see further losses.
Despite the downturn, analytics firm Santiment pointed out that Bitcoin still managed a small weekly gain, hovering around $84.3K. While global stock markets fell due to inflation and tariff concerns, Bitcoinโs slight rebound after the market closed hints at a possible shift away from its past correlation with equities.
This is a contrast to 2022 when Bitcoin closely followed stock market trends.
Whatโs Next for Bitcoin? Experts Weigh In
While short-term uncertainty remains, some experts see long-term positives. Joel Kruger, a strategist at LMAX Group, highlighted that crypto adoption is growing, with major financial institutions increasing their involvement. He believes that while Bitcoin may experience more dips, strong support around the $70,000โ$75,000 range could lead to a recovery later this year.
On the Downsideโฆ
Crypto analyst Michaรซl van de Poppe warns that Bitcoin is losing momentum, with key liquidity levels below $84K at risk. If BTC breaks this support, further declines could follow. He suggests another week of drops might be on the way before a potential rebound in Q2.
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History says Bitcoin loves a comeback, but for now, all eyes are on whether it can hold the line or if thereโs more pain ahead.
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Weak U.S. economic data, rising inflation, and new tariffs triggered a broader selloff across both crypto and stock markets.