The cryptocurrency market plunged over the weekend, driven by mounting economic fears and uncertainty around the U.S. government’s Bitcoin reserve strategy.
Crypto Markets in the Red
Bitcoin dropped 5.35%, briefly hitting $80,120 before rebounding to $82,900. Ethereum lost 13%, while XRP and Pi faced the steepest declines at 18.3% and 14.67%, respectively. The total market capitalization dropped 5% to $2.71 trillion.
Market research firm 10x Research called the movement a “textbook correction,” while the Bitcoin Fear & Greed Index plunged into “extreme fear” territory at 20.
Crypto Summit Fails to Reassure Markets
The downturn followed a lackluster White House crypto summit that failed to provide clarity on the administration’s crypto policy.
President Trump’s Strategic Bitcoin Reserve executive order, signed just days prior, only confirmed the government would hold onto seized crypto assets rather than buy new Bitcoin.
This created a largely unimpressed market mood during the summit, similar to the body language of Michael Saylor, who attended the event.
But concerns don’t stop there. Broader economic issues, such as inflation and trade tensions, are fueling market uncertainty.
Trade War, Recession Fears Add to Market Jitters
The crypto market wasn’t the only sector feeling the strain. U.S. stock futures dropped sharply as investors digested February’s jobs report and prepared for upcoming inflation data amid uncertainties surrounding trade policy. The February jobs report showed a slight rise in job gains, but the unemployment rate increased to 4.1%, while federal employment fell due to cuts at the Department of Government Efficiency (DOGE).
Futures for the Dow, S&P 500, and Nasdaq all slid 1%, extending last week’s losses, with concerns over ongoing US-Mexico-Canada tariff negotiations and potential recession fears contributing to the volatility.
This week, investors are closely watching key inflation data, including the Producer Price Index (PPI) and Consumer Price Index (CPI), to assess how tariffs influence future prices.
What to Expect Next?
With key U.S. inflation reports due this week, traders should prepare for more market turbulence. Any signs of rising inflation could influence Federal Reserve policy, affecting risk assets, including cryptocurrencies.
Arthur Hayes, co-founder of BitMEX, suggests Bitcoin could retest the $78,000 resistance level and, if it fails, may target $75,000 next. Hayes also pointed to significant open interest in Bitcoin options between $70,000 and $75,000, signaling potential for increased volatility if prices enter that range.
Why This Matters
This market slump reflects mounting concerns over inflation, recession, and U.S. trade policy. The failure to clarify the government’s crypto stance has only intensified uncertainty.
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