Bitcoin and ether sank further on Monday night amid a broader market sell-off as investors continued to assess the impact of U.S. President Donald Trump's bitcoin reserve plan and anxiety over tariff policies and a potential recession.
Bitcoin slid 5% below $77,000 at one stage tonight before recovering to $78,250 at the time of writing, according to The Block's price page. Ether traded down 11% over the past 24 hours at $1,820, its lowest level since October 2023.
Dogecoin plunged 14%, the largest drop among the top 10 cryptocurrencies. XRP fell 10.7% and Cardano lost 10.2%.
The U.S. stock market also plunged on Monday, with the Dow closing down 2.08% and the broader S&P 500 dropping by 2.7% — both posting their worst day of the year. The tech-heavy Nasdaq Composite lost 4%, marking its largest single-day fall since September 2022, according to CNN.
"[Trump's] offhand remark that the market crash was 'okay' and that he wouldn’t rule out a recession due to tariff uncertainty further unsettled investors, intensifying the sharp sell-off across Wall Street," said Peter Chung, head of research at Presto Research.
"All risk assets, not just cryptos, are in decline," Chung said. "Rather than any specific piece of news, I believe it is the market's nervousness playing out having spent the weekend mulling over the recent headlines around the tariffs, trade wars and recession concerns amid the D.C. spending cuts."
Trump has doubled the tariff on Chinese imports to 20%. The U.S. leader also threatened to impose substantial tariffs on imports from Canada and Mexico but subsequently granted a delay until April 2.
BitMEX co-founder Arthur Hayes urged investors to remain patient. "The plan: Be fxxking patient. BTC likely bottoms around $70k. [A] 36% correction from $110k ATH [is very] normal for a bull market," Hayes said today in a post on X.
"Traders will try to buy the dip, if you are more risk averse wait for the central banks to ease then deploy more capital. You might not catch the bottom but you also won’t have to mentally suffer through a long period of sideways and potential unrealized losses," Hayes added.
Chung of Presto noted that how long this will play out is difficult to tell but given the market's increasing expectation of the Fed's rate cut in the first half of this year amid the market jitters, "the next key event to watch for any clue on potential bottoming is the FOMC next week (March 19th)."
"Powell will most likely leave the rate unchanged, but the market will be looking eagerly for any dovish language in his briefing, which can hint at potential cuts in May or June FOMCs," Chung added.
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