The cryptocurrency market experienced a sharp downturn on Friday, erasing most of the weekly gains and sending shockwaves across digital asset investors. Bitcoin, which had been trading near $88,000 earlier in the week, dropped to $83,800—a 3.8% decline within 24 hours. This sudden selloff dragged major altcoins into negative territory, with Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) each falling close to 10%. Overall, the total crypto market cap shed approximately $115 billion in value, according to real-time market tracking data.
One of the most striking developments was Ethereum’s performance relative to Bitcoin. ETH fell over 6%, marking its weakest valuation against BTC since May 2020. Despite growing institutional interest in Bitcoin through ETFs—over $1 billion in inflows over the past two weeks—Ethereum ETFs have seen no new capital since early March. This stagnation has sparked concern among analysts about Ethereum’s ability to maintain momentum in the current market cycle.
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Stock Market Weakness Fuels Crypto Selloff
The crypto downturn didn’t occur in isolation. U.S. equities also faced significant pressure following the release of weaker-than-expected economic data. The S&P 500 declined by 2%, while the tech-heavy Nasdaq Composite dropped 2.8%. Crypto-linked stocks were hit especially hard: MicroStrategy (MSTR), the largest corporate holder of Bitcoin, fell 10%, and Coinbase (COIN) dropped 7.7%.
Recent inflation figures showed a 2.5% year-over-year increase in consumer prices, with core inflation rising to 2.8%—slightly above forecasts. Meanwhile, consumer spending grew by only 0.4%, signaling sluggish demand and tepid economic growth. The Federal Reserve’s GDPNow model now projects a potential 2.8% contraction in U.S. GDP for Q1 2025, fueling fears of stagflation—a scenario marked by stagnant growth and persistent inflation.
Adding to market anxiety, new U.S. tariffs are set to take effect on April 2, increasing uncertainty for global trade and investment flows. These macroeconomic headwinds have created a risk-off environment, pushing investors away from volatile assets like cryptocurrencies and tech stocks.
Bitcoin’s Correction: Expected or Warning Sign?
Bitcoin’s dip to $84,000 wasn’t entirely unexpected. Traders had anticipated a pullback due to an unfilled CME futures gap from earlier in the week. Historically, Bitcoin tends to revisit these gaps before resuming its trend, making this correction a natural part of price discovery.
However, the broader concern lies in Bitcoin’s continued correlation with traditional financial markets—particularly the Nasdaq. While some analysts hoped for a decoupling, Friday’s move suggests that macroeconomic forces still heavily influence crypto valuations.
Despite the drop, Bitcoin managed a marginal weekly gain of +0.4%, ending the period around $84.3K. According to analytics firm Santiment, this small rebound after market hours could signal shifting dynamics.
“Bitcoin has managed a positive week, up about +0.4% with a market value of $84.3K at the time of this writing. The S&P 500 and global equities have been hit hard by inflation and tariff concerns—yet BTC shows signs of resilience.”
This behavior contrasts sharply with 2022, when Bitcoin moved almost in lockstep with stock markets during broad sell-offs. Today’s slight divergence hints at maturing market structure and growing confidence in Bitcoin as a standalone asset class.
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What’s Next for Bitcoin? Expert Outlook
While short-term volatility remains high, several experts believe the long-term fundamentals are intact.
Joel Kruger, strategist at LMAX Group, notes that institutional adoption continues to grow, with major financial players deepening their involvement in crypto infrastructure and ETF products. He argues that while near-term dips are possible, strong support levels between $70,000 and $75,000 could act as a floor for Bitcoin, potentially setting the stage for a recovery in late 2025.
On the other hand, crypto analyst Michaël van de Poppe warns that Bitcoin is losing upward momentum. He highlights that key liquidity zones below $84,000 are now under threat. If Bitcoin breaks below this level, further downside pressure could emerge, possibly extending losses into early Q2 before any meaningful rebound.
Market sentiment remains cautious but not bearish outright. Traders are watching volatility indicators, on-chain data, and macroeconomic cues closely to gauge the next directional move.
Frequently Asked Questions
Why did the crypto market crash today?
The selloff was triggered by weak U.S. economic data, higher-than-expected inflation, slowing consumer spending, and upcoming tariff changes—all contributing to a broader risk-off sentiment in financial markets.
Why is Ethereum performing poorly against Bitcoin?
Ethereum has lagged due to lackluster demand for ETH ETFs compared to strong inflows into Bitcoin ETFs. Additionally, network activity and developer momentum have not translated into investor confidence as quickly as hoped.
Is Bitcoin decoupling from stock markets?
There are early signs of decoupling. While Bitcoin still reacts to macro trends, its ability to post a weekly gain despite global equity declines suggests growing independence.
What price levels should investors watch for Bitcoin?
Key support sits between $70,000 and $75,000. A break below $84,000 could signal further downside, while holding above $83,500 may indicate stabilization.
Could this be a buying opportunity?
Historically, sharp corrections have preceded strong rallies in bull markets. Long-term investors may view this as a strategic entry point, especially if macro conditions stabilize.
What role do ETFs play in current market dynamics?
Bitcoin ETFs have driven significant institutional inflows, boosting demand and liquidity. In contrast, delayed or stagnant Ethereum ETF approvals have dampened ETH sentiment.
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Final Thoughts
The recent crypto selloff reflects broader financial market anxieties rather than isolated issues within the digital asset space. While Ethereum’s underperformance against Bitcoin raises questions about altcoin leadership in this cycle, Bitcoin’s resilience—even amid macro turmoil—suggests underlying strength.
For investors, the key takeaway is vigilance: monitor macroeconomic indicators, ETF flows, and on-chain metrics to navigate volatility. As the market evolves, opportunities often emerge from uncertainty—especially for those prepared to act with clarity and conviction.
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