TLDR
Bitcoin fell below $84,000 following a market-wide sell-off that erased $115 billion in weekly gains. Ethereum also declined, reaching its lowest value against Bitcoin since May 2020, as ETF inflows stalled. This downturn coincided with disappointing U.S. economic data and rising inflation fears. Concerns about the impending “Liberation Day” tariffs on April 2 have further heightened market anxiety. Technical indicators suggest potential for more declines, although support may emerge in the $70,000 to $75,000 range for Bitcoin.
Market Overview
On March 28, 2025, the cryptocurrency market experienced a significant downturn as Bitcoin dropped below $84,000, erasing the gains made earlier in the week. Having traded close to $88,000 just 24 hours prior, Bitcoin fell to $83,800, reflecting a 3.8% decrease. The situation was even more severe for the broader cryptocurrency market, with the CoinDesk 20 Index—a benchmark for major cryptocurrencies—declining by 5.7%.
Major Cryptocurrency Losses
Several prominent cryptocurrencies recorded even larger declines. Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) saw their values plummet by nearly 10%. This widespread sell-off resulted in a staggering loss of approximately $115 billion from the total cryptocurrency market capitalization, as per TradingView data. Notably, every asset in the CoinDesk 20 Index suffered losses during this downturn, with Ethereum particularly affected, dropping over 6%. This decline marked Ethereum’s lowest relative price against Bitcoin since May 2020, as it continues to struggle with stagnant inflows to its spot ETFs. In contrast, Bitcoin ETFs have recently attracted more than $1 billion in inflows, highlighting a notable shift in investor sentiment between the two leading cryptocurrencies.
Stocks Decline Alongside Crypto
The downturn in the cryptocurrency market coincided with a challenging day for U.S. stocks, with the S&P 500 falling by 2% and the Nasdaq, which is heavily weighted towards technology, dropping by 2.8%. Stocks tied to the cryptocurrency sector also faced significant losses; for instance, MicroStrategy (MSTR), the largest corporate holder of Bitcoin, saw a 10% decrease, while cryptocurrency exchange Coinbase (COIN) dropped by 7.7%. The sell-off appears to have been prompted by troubling economic indicators. The February Personal Consumption Expenditure (PCE) inflation report revealed a year-over-year increase of 2.5% in the price index, with core inflation slightly exceeding expectations at 2.8%. Consumer spending showed only a modest rise of 0.4%, indicating potential challenges for economic growth. The Federal Reserve of Atlanta’s GDPNow model now estimates a contraction of 2.8% for the U.S. economy in the first quarter of 2025, raising concerns about stagflation—a scenario characterized by high inflation coupled with stagnant growth.
Impending Tariffs and Technical Factors
Another factor contributing to market unease is the upcoming implementation of extensive U.S. tariffs, set to be enacted by the Trump administration on April 2, an event referred to as “Liberation Day.” From a technical analysis standpoint, Bitcoin’s recent decline may relate to filling a price gap that emerged between the opening price on Monday and the previous week’s closing price in the Chicago Mercantile Exchange futures market. Historically, Bitcoin has a tendency to revisit such gaps, which lie around the $84,000-$85,000 range. Some analysts had anticipated this price movement earlier in the week. Despite the current market challenges, some experts express cautious optimism for the long-term outlook. Joel Kruger, a market strategist at LMAX Group, pointed out several encouraging trends in the crypto sector, including favorable regulatory developments in the U.S. and increased participation from traditional financial institutions. He suggested that if prices do drop further, they may find support in the $70,000 to $75,000 range.
Market Sentiment and Ethereum’s Struggles
However, prevailing fears are dominating the market. The crypto fear and greed index has plummeted to 25, indicating extreme fear among investors ahead of the impending tariffs. Economists have warned that these tariffs could trigger a recession, potentially negating some of the economic progress made during the Biden administration. Ethereum faces additional challenges not only from market sentiment but also from losing market share in critical areas such as decentralized finance, non-fungible tokens, and decentralized exchanges. Competing layer-1 chains like Sonic and Berachain, along with layer-2 networks such as Base and Arbitrum, have been capturing this market share, further complicating Ethereum’s price trajectory. Technical analysis indicates that Ethereum could experience further declines. The weekly chart shows a triple-top pattern forming at $4,000 with a neckline at $2,130, which Ethereum broke below earlier this month. The subsequent retest of this neckline is often interpreted as a bearish signal. Current price trends suggest Ethereum may drop to $1,537, marking its lowest level since October 9, unless it can surpass the resistance level at $2,131, which would negate the bearish outlook.
