Expectations for a continued recovery in the cryptocurrency market evaporated on Friday, as a widespread sell-off erased nearly all gains made earlier in the week.
Bitcoin (BTC), which was nearly at $88,000 just 24 hours prior, plummeted to around $83,800, reflecting a 3.8% decline over the last day. The broader CoinDesk 20 Index dropped by 5.7%, with native cryptocurrencies such as Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) each facing nearly 10% losses during the same timeframe. This sell-off resulted in a loss of $115 billion from the total market capitalization of cryptocurrencies, according to market data.
Ethereum’s ether (ETH) fell over 6%, continuing its downward trajectory against BTC and reaching its weakest relative price compared to Bitcoin since May 2020. Highlighting the bearish sentiment, spot ETH exchange-traded funds have not seen any net inflows since early March, while their BTC counterparts attracted over $1 billion in inflows during the past two weeks.
This decline in crypto prices coincided with a drop in U.S. stock markets on the back of disappointing economic indicators, with the S&P 500 and the tech-heavy Nasdaq index falling by 2% and 2.8% respectively. Stocks tied to the cryptocurrency sector also faced significant declines: the largest corporate BTC holder, MicroStrategy (MSTR), ended the day down 10%, and crypto exchange Coinbase (COIN) lost 7.7%.
The PCE inflation report for February, released today, indicated a 2.5% year-over-year rise in the price index, with core inflation at 2.8%, slightly surpassing expectations. Consumer spending saw a modest increase of 0.4%, but inflation-adjusted figures suggest minimal growth, raising concerns about potential challenges for economic expansion. The Federal Reserve of Atlanta’s GDPNow model now anticipates a 2.8% contraction in the U.S. economy in the first quarter, which adjusts to a 0.5% decline when accounting for gold imports and exports, fueling stagflation fears.
Additionally, the introduction of broad-scale U.S. tariffs next week—referred to as “Liberation Day” on April 2 by the Trump administration—has heightened concerns among investors across markets.
CME gapfill or another drop?
Bitcoin has recently displayed a close correlation with the Nasdaq, so if U.S. equities continue to decline, it could impact the broader crypto market negatively. However, a more optimistic take might suggest that today’s fall could be Bitcoin filling a price gap around $84,000-$85,000 that occurred between Monday’s market opening and the prior week’s close on the Chicago Mercantile Exchange futures. Historically, Bitcoin has tended to revisit similar CME gaps, and analysts have indicated that a drop to $84,000 was on the horizon.
Read more: Bitcoin’s Weekend Surge Forms Another CME Gap, Signaling Possible Drop Back
“At this point, it’s challenging to determine if we have already witnessed a bottom in 2025,” said a market strategist. Despite the ongoing correction, he observed several encouraging trends such as pro-crypto policies in the U.S. and the growing involvement of traditional financial firms in the crypto space, which could benefit digital assets as the year progresses.
“Any further setbacks we might encounter are likely to find considerable support in the $70,000 to $75,000 range,” he added.