The cryptocurrency market experienced a severe sell-off on Monday, particularly during the European morning hours, as Bitcoin plummeted past the $75,000 mark. This downturn extends the losses seen in major tokens to nearly 20%, causing significant distress among investors.
Tokens such as XRP, Solana (SOL), and Dogecoin (DOGE) saw declines of over 5% leading up to the European market open, contributing to the erosion of tens of billions in market capitalization. This sell-off was primarily driven by a wave of macroeconomic uncertainty and aggressive liquidations, which approached the $1 billion mark.
The CoinDesk 20 (CD20) index, renowned for tracking the largest cryptocurrency tokens, dipped by 12%, underscoring a prevailing risk-off sentiment throughout the sector. Notably, XRP and SOL led the charge downwards, each experiencing drops of more than 20% within a 24-hour period and crossing critical support levels.
XRP, trading at approximately $1.70, has now fallen below its crucial 200-day moving average – a significant technical support point – heightening concerns of potential further declines towards $1.75. On the other hand, SOL has slid under the $100 threshold, breaking its 50-day moving average and indicating a staggering 64% retreat from its all-time highs. Dogecoin, a beloved meme-based token, was likewise affected, falling 20% to $0.13, as indicated in a recent CoinDesk analysis.
The current market turmoil can be attributed to geopolitical tensions, particularly following President Donald Trump’s recent imposition of 25% tariffs on imports from Canada and Mexico, alongside a doubled 20% levy on China, which has elicited retaliatory threats from these nations.
China is reportedly considering front-loaded stimulus measures in response to these tariffs, further escalating market anxieties. Investors have begun to flee riskier assets, seeking refuge in safe havens such as gold, the Japanese yen, and the Australian dollar.
As market analysts anticipate a continuation of this decline through the Asian trading session ahead of the U.S. open, Jeff Mei, COO at BTSE, noted in a Telegram message, “Historically, crypto markets tend to front-run stock markets over the weekend, and this morning’s declines in Asian markets seem to support this notion. We expect the cryptocurrency markets to dip as U.S. markets open.”
The potential for recovery remains uncertain, hinging on whether significant countries can negotiate short-term tariff delays or agreements within the week. Currently, smaller trading partners like Vietnam, Cambodia, and Taiwan have committed to reducing their tariffs and increasing U.S. investment in exchange for relief; however, without engagement from larger partners, such as Japan or China, confidence in the markets may remain shaken.
Augustine Fan, head of insights at SignalPlus, observed that the prevailing price movements exhibit bear market characteristics. He commented, “All signs indicate that macro markets are currently in a ‘bear market’ scenario, where rallies are to be sold off. Investors must acclimatize to this new reality, which poses challenges to long-term positions.”
Despite this bleak outlook, Fan remains cautiously optimistic about Bitcoin’s long-term trajectory, stating that it has the potential to catch up with spot gold, though such catalysts seem to be lacking at present. He concluded, “Risk management will continue to take precedence until there is a substantial alleviation of global market pressures.”
