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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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Why Trust Cryptonews
The crypto market has been rocked by extreme volatility as Bitcoin (BTC) plummeted below $84,000, wiping out billions in market capitalization.
Just days ago, BTC surged to a high of $95,000, fueled by renewed institutional interest following a groundbreaking announcement from U.S. President Donald Trump.
Trump’s declaration of a strategic crypto reserve, which includes Bitcoin, Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA), initially sent the market into a frenzy, pushing BTC to $90K+ high.
However, the surge left a significant gap in the CME Bitcoin futures market, which historically acts as a magnet for price corrections.
As anticipated, Bitcoin retraced to $83,500 in the Asian trading hours on Tuesday, filling the gap entirely.
This drop triggered a cascade of liquidations, wiping out over $900 million in bullish bets on crypto-tracked futures in the past 24 hours.
In just three days, the market saw over $1.5 billion in liquidations, marking one of the most aggressive reversals in recent months.
Nearly $400 million in long positions on Bitcoin alone were forcefully closed, mainly during late U.S. and early Asian trading hours, exacerbating the downward momentum.
In fact, according to Ali Martinez, over 25,000 BTC, valued at over $2 billion, were withdrawn from exchanges.
These market instabilities have led to increased market fear, with the Greed and Fear Index showing levels close to “Extreme Fear.” This level of fear was last seen in the last quarter of 2022, following the fall of Terra Luna and FTX.
The market’s sharp decline was further fueled by Trump’s official implementation of a 25% tariff on Canada and Mexico, alongside a 20% tariff on China.
Crypto Markets in Freefall as Global Trade War Fears Mount
The cryptocurrency market has entered a phase of extreme turbulence, mirroring traditional financial markets, as the Trump administration’s trade policies continue to rattle investor confidence.
Bitcoin, which had been trading above $90,000 just days before, suffered a drastic pullback and plunged below $84,000.
Ethereum (ETH) and other major altcoins were not spared. ETH dropped over 11%, while Solana (SOL), Cardano (ADA), and Chainlink (LINK) suffered double-digit losses.
The timing of Bitcoin’s drop aligns with increasing uncertainty surrounding global trade relations.
Trump’s confirmation of fresh tariffs on key trading partners has escalated fears of a full-scale trade war, prompting investors to abandon riskier assets, including cryptocurrencies.
According to data from Watcher.Guru, over $1.07 billion in liquidations occurred within 24 hours, marking one of the most significant market wipeouts in recent months.
Adding to the bearish sentiment, The Kobeissi Letter reported that only 3% of investors now view Bitcoin as a hedge against a trade war.
This is a dramatic shift from previous market cycles, where Bitcoin was often considered a safe haven during economic uncertainty.
Instead, capital has flowed into traditional safe-haven assets such as gold, which has seen a notable uptick in demand.
Global equity markets have also suffered. The Dow Jones Industrial Average (DJI) plummeted 649.67 points, while the S&P 500 and Nasdaq recorded sharp declines.
Technology stocks, particularly Nvidia (NVDA), suffered significant losses. Despite reporting record revenues of $39.3 billion, NVDA dipped below its February 3rd post-DeepSeek low.
In retaliation to the U.S. tariffs, Canada and Mexico announced immediate countermeasures.
Canadian Prime Minister Justin Trudeau imposed 25% tariffs on $107 billion worth of U.S. goods, including a first wave of $21 billion in tariffs set to take effect immediately.
Meanwhile, Chinese officials have also vowed to implement their own countermeasures, further exacerbating market fears.
With rising global economic tensions, Bitcoin and the broader crypto market are facing their most challenging environments in recent history.
Bitcoin Faces Critical Technical Levels as Analysts Eye Further Downside
As Bitcoin continues to experience extreme volatility, market analysts are closely monitoring key technical levels to determine the next move.
The recent price action has closed two significant CME price gaps: $92,800 and $94,000 and $78,000 and $80,700.
While some see these closures as a sign of stabilization, others warn that the market remains vulnerable to further downside.
Technical expert Rekt Capital noted that Bitcoin’s latest correction represents a 28.5% drawdown, one of the most significant declines in the current market cycle.
Historically, similar drawdowns have provided strong buying opportunities, but the current macroeconomic situation may delay a potential recovery.
With Trump’s tariffs in full effect and global markets in turmoil, uncertainty remains at an all-time high.
On-chain analyst Miles Deutscher highlighted that if Bitcoin fails to hold above the $80,000 level, it could open the door for a further decline toward $77,930, corresponding to an unfilled CME futures gap from early November.
Market participants are also closely monitoring Bitcoin’s dominance, which currently stands at 58%, to gauge the broader sentiment across the crypto sector.
Meme coins and smaller-cap assets have suffered even greater declines, further exacerbating the market-wide selloff.
Looking forward, before we can move from our current extreme fear, Bitcoin bulls must reclaim critical resistance levels above $90,000 to restore confidence in the market.
However, the road to recovery remains uncertain, with uncertainty looming large, global trade tensions escalating, and investor sentiment shifting.
