Crypto Market Experiences Severe Sell-Off
A significant sell-off in the cryptocurrency market escalated into a brutal downturn during the European morning hours on Monday, as bitcoin plummeted below the $75,000 mark. This decline extended the losses across major tokens to nearly 20%, prompting widespread concern among investors.
Tokens such as XRP, solana (SOL), and dogecoin (DOGE) each suffered declines exceeding 5% in the hours leading up to the European market opening. This downturn was characterized by a massive wave of liquidations that approached $1 billion, coupled with pervasive macroeconomic uncertainties that have sent ripples through the market.
The broad-based CoinDesk 20 (CD20) index, which tracks the performance of the largest cryptocurrencies, witnessed a sharp slump of 12%. This indicates a prevailing risk-off sentiment that is gripping the entire sector. Notably, XRP and SOL were at the forefront of this decline, each experiencing a staggering drop of over 20% in the past 24 hours and breaking through critical support levels.
XRP, currently trading at approximately $1.70, has fallen below its crucial 200-day moving average, a key technical indicator, raising concerns about potential further downside towards $1.75. In a similar vein, SOL has dropped below $100, breaching its 50-day moving average and reflecting a significant 64% decline from its all-time high. Meanwhile, DOGE, the popular meme-based cryptocurrency, has not escaped the carnage, tumbling by 20% to $0.13, as highlighted in a CoinDesk analysis earlier on Monday.
Compounding the situation, President Donald Trump recently announced a series of aggressive tariffs, including a 25% levy on imports from Canada and Mexico, in addition to a doubled 20% tariff on Chinese goods. These measures have prompted retaliatory threats from affected nations. Reports indicate that China is considering front-loaded stimulus measures to mitigate the impact of these tariffs, further heightening market jitters.
As a result, investors are increasingly shifting their assets from riskier investments to safer havens, such as gold, the Japanese yen, and the Australian dollar. Market observers anticipate that the ongoing decline will persist through the Asian trading session as the U.S. market prepares to open.
“Historically, crypto markets tend to lead stock markets during the weekends, and the declines observed in the Asian markets this morning appear to reinforce this notion,” stated Jeff Mei, COO at BTSE, in a Telegram message to CoinDesk. “We expect the crypto markets to continue their downward trend once U.S. markets open.”
Mei further elaborated, “The potential for recovery hinges on which major countries can negotiate short-term tariff delays or agreements this week. So far, countries like Vietnam, Cambodia, and Taiwan have expressed intentions to reduce their tariffs or enhance U.S. investment in exchange for relief. However, substantial confidence and certainty in the markets would require larger trading partners, such as Japan or China, to follow suit.”
In addition, Augustine Fan, head of insights at SignalPlus, remarked that the current price movements reflect typical bear market behavior. “All indicators suggest that macro markets are firmly in ‘bear market’ mode, where any rallies are likely to be sold off, compelling investors to adapt to this new reality against their long-term strategies,” Fan conveyed in a Telegram message. “The market is expected to continue frustrating and undermining investor confidence for the foreseeable future.”
“In the longer term, technical charts might suggest that BTC has broken out relative to global equities and is due for a correction towards spot gold prices. However, current catalysts appear fleeting, and risk management—manifested as lower prices—will likely prevail until the global economic landscape stabilizes,” Fan concluded.
