Bitcoin recovers to $66,300 following overnight decline in cryptocurrency market.

Bitcoin dropped to $64,270 just after midnight UTC before recovering to $66,300, with limited liquidity intensifying fluctuations linked to U.S. tariff announcements and geopolitical uncertainties.

Bitcoin rebounds to $66,300 after selloff (Ravi Sharma/Unsplash modified by CoinDesk)

Key points:

• Bitcoin declined to $64,270 from $67,700 shortly after midnight UTC, then recovered to $66,300, reflecting a dip and partial recovery in S&P 500 futures.
• Gold reached its highest level since January 30 as President Donald Trump announced new 15% global tariffs, and tensions with Iran increased demand for safe-haven assets.
• SOL and SUI experienced declines of 7%-8% in low liquidity conditions, contributing to $270 million in altcoin liquidations, although several tokens reduced their losses during European trading hours.

The cryptocurrency market witnessed an unusual period of volatility during the Asia trading session on Monday, with bitcoin BTC$65,755.04 dropping over 5% to $64,270 shortly after midnight UTC before recovering to $66,300 by 11:00 UTC.

The selloff and subsequent recovery mirrored trends in U.S. equities. Futures associated with the S&P 500 index fell by 0.84% after opening on Sunday evening, before beginning to recover five hours later.

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Gold futures experienced an uptick, rising at the Sunday evening open to the highest level since January 30 before some of those gains were relinquished during European hours. Silver followed a similar trend.

The increase in precious metals amid weak performance in risk assets follows U.S. President Donald Trump’s announcement of new 15% global tariffs on trading partners and the escalation of U.S. military presence near Iran, which spurred a flight to safe-haven investments.

Altcoins faced challenges due to low liquidity overnight, with solana (SOL) and SUI$0.9066 declining by 7% to 8% before both rebounded during European hours, resulting in $270 million in altcoin liquidations, according to CoinGlass.

Derivatives positioning

• Interest in leveraged products remains subdued, as reflected in total crypto futures open interest remaining under $100 billion for more than two weeks.
• Liquidations are not aiding the situation. Over the past 24 hours, crypto futures positions worth $500 million have been forcibly liquidated by exchanges due to margin deficiencies.
• Traders continue to allocate funds in futures linked to tokens tied to traditional assets like gold. For example, open interest in Tether gold (XAUT) futures has grown by 14% in 24 hours, while BTC, ETH, SOL, HYPE, DOGE, and others are experiencing capital outflows.
• ZEC and CRO are the only tokens showing a positive 24-hour cumulative volume delta (CVD), indicating buyer strength. Conversely, BTC and other major cryptocurrencies exhibit negative CVDs, signaling selling pressure dominating buyers.
• Bitcoin’s 30-day implied volatility index, BVIV, has increased by 9% to over 60%, suggesting heightened uncertainty.
• Traders pursued bitcoin put options at levels $58,000, $60,000, and $62,000 as Trump’s new tariffs introduced fresh market uncertainty.
• On Deribit, bitcoin and ether puts traded at a premium to calls across all time frames, reflecting ongoing downside concerns.

Token talk

• The altcoin market remains bearish on Monday following an exaggerated selloff instigated by weakness in bitcoin and U.S. equities.
• Low liquidity conditions caused pump.fun’s native PUMP token to lose 8.5% before recovering, while layer zero (ZRO) began selling off early Sunday, experiencing a 16.5% decline over 24 hours before rebounding at 04:00 UTC.
• A limited number of tokens outperformed the broader market. The restaking token ETHFI surged over 10% from Monday morning’s lows.
• Telegram-associated toncoin (TON) displayed greater stability overnight, dropping by only 3.6% before bouncing back by 4.9%.
• CoinDesk’s DeFi Select Index (DFX) was the top-performing benchmark in the past 24 hours, losing just 1.84%, while the CoinDesk Smart Contract Platform Select Index and CoinDesk Computing Select Index declined by 3.56% and 3.23%, respectively.
• The altcoin market has largely mirrored bitcoin’s movements throughout February, albeit with insufficient liquidity resulting in exaggerated price shifts. If bitcoin can establish a local low and rebound above $70,000, several altcoins may be positioned for significant upside following the depletion of order books in early February.