
Hopes for a sustained recovery in the crypto market quickly evaporated on Friday as a broad sell-off wiped out nearly all of the past week’s price gains.
Bitcoin (BTC), which was trading at around $88,000 just a few days ago, plummeted to $83,800. The broader market suffered even steeper losses. Major altcoins such as Avalanche (AVAX), Dogecoin (DOGE), Near (NEAR), and Uniswap (UNI) lost nearly 10% of their value. In total, around $115 billion in market capitalization was wiped out from the global crypto market, according to data from TradingView.
Ethereum Under Pressure
Ethereum (ETH) also came under severe pressure, losing over 6%. This brought the ETH-BTC ratio to its lowest level since May 2020 – a clear sign of Ethereum’s continued weakness against Bitcoin.
This trend is compounded by the lack of interest in Ethereum ETFs. There have been no net inflows into Ether-based funds since the beginning of March, while Bitcoin ETFs attracted over $1 billion in fresh capital during the same period, according to data from Farside Investors.
Negative sentiment in the stock markets
The downturn in cryptocurrencies coincided with significant losses in the US stock markets. The S&P 500 lost 2% on Friday, while the technology-focused Nasdaq index even tumbled 2.8% – primarily as a result of disappointing economic data. Stocks with a strong crypto focus also came under pressure: MicroStrategy (MSTR), the largest institutional Bitcoin investor, ended the day down 10%. The crypto exchange Coinbase (COIN) lost 7.7%.
The uncertainty was triggered by the February PCE inflation report, which showed a 2.5% year-over-year price increase. Core inflation was 2.8%, slightly above expectations. While consumer spending rose by 0.4%, real growth was barely visible when adjusted for inflation. According to the Federal Reserve Bank of Atlanta’s GDPNow model, the US economy could shrink by 2.8% in the first quarter—or by 0.5% if gold imports and exports are taken into account. This outlook is fueling fears of impending stagflation.
In addition, the impending entry into force of new, comprehensive US tariffs – announced by the Trump administration and effective from April 2, the so-called “Liberation Day” – is further weighing on investor confidence.
Correction or healthy CME gap filling?
Bitcoin has recently shown a close correlation with the Nasdaq. Should the US stock market continue to decline, this could also put additional pressure on the crypto market. However, there is also an optimistic perspective: According to CoinDesk analyst James Van Straten, BTC’s recent decline could be related to the closing of a so-called CME gap in the $84,000–$85,000 range. This price gap occurred between the start of the week on Monday and the previous week’s closing price on the Chicago Mercantile Exchange.
Van Straten emphasized that any further pullbacks are likely to find solid support in the $70,000-$75,000 range.
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