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Bitcoin and the broader cryptocurrency market are under significant pressure as macroeconomic concerns fuel investor anxiety.
Over the past 24 hours, the price of BTC fell 2.2%, briefly touching $76,624 before recovering to $81,376 at press time.
Ethereum (ETH), the second-largest crypto asset by market capitalization, also dropped 10% to $1,760, its lowest level since November 2023. At the time of writing, ETH had slightly recovered to above $1,900.
Other major assets, including Solana (SOL), XRP, Cardano (ADA), Dogecoin (DOGE), and Binance Coin (BNB), recorded significant losses of more than 4% each during the reporting period.
Data from Coinglass showed that the sell-off triggered a surge in liquidations, with 321,000 traders losing a combined $906 million.
According to the data, traders with long positions betting on further price increases suffered the most, with $732.2 million wiped out, while short positions accounted for $173 million.
Why did the market crash?
Macroeconomic uncertainty appears to be the primary driver of the market downturn, which has had a far-reaching impact.
Bitcoin analyst Fred Krueger attributed the plunge to fears of an economic downturn, stating:
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“The reason Bitcoin goes down is simple: fear of recession.”
Over the weekend, US President Donald Trump did not dismiss the possibility of a recession, sparking fresh concerns across financial markets.
Analysts at The Kobeissi Letter highlighted the ripple effect of Trump’s statement, noting that technology shares have suffered steep losses. The Nasdaq 100 has fallen 12.4% in 13 trading sessions, approaching bear market territory at its fastest pace since the March 2020 crash.
The analysts continued that cryptocurrencies have not been spared. Since peaking on December 17, the market has shed $1.3 trillion, with a 35% drop in the last three months signaling a deepening correction.
However, with no clear catalyst to drive a reversal, the market remains susceptible to further declines.
Arthur Hayes, BitMEX co-founder, suggested that Bitcoin might find a bottom around $70,000, marking a 36% decline from its $110,000 peak. However, he noted that such corrections are common in bull markets.
He added that:
“Traders will try to buy the dip. If you’re more risk-averse, look for central banks to ease before deploying more capital. You may not catch the bottom, but you also won’t have to mentally endure a long period of sideways movement and potential unrealized losses.”
The article Bitcoin and Ethereum Reel as Recession Fears Wipe Out $906 Million from Traders appeared first on CryptoSlate.
