Cryptocurrency values have sharply declined in the last several hours, with bitcoin (BTC) falling approximately 3% in the past 24 hours, while significant altcoins such as XRP, BNB, and SOL have dropped between 4% and 5% during the same timeframe.
The overall cryptocurrency market, as indicated by a widely recognized index, has seen a loss of about 3.3% in value. This sudden downturn has resulted in a weekly performance decrease of 1.7% for BTC, whereas the index reflects a nearly 5% dip.
Within the last day, over $300 million in long positions were liquidated on centralized exchanges, alongside liquidations of around $38.8 million in short positions, according to recent data.
This decline appears to be part of a broader derisking strategy among traders, as market participants brace for the effects of reciprocal tariffs announced by President Donald Trump, scheduled to take effect on April 2. This anticipation intensified after dire core Personal Consumption Expenditures (PCE) data was released on Friday.
Consumer confidence indicators revealed a more significant drop than expected this week, with future expectations falling to a 12-year low, clearly below levels typically associated with a looming recession.
This collection of factors has led investors to lessen their risk exposure, causing a shift towards safer assets. Recent reports indicate that gold-backed cryptocurrencies have gained from this trend, with their market capitalization surpassing $1.4 billion in March.
Gold-backed tokens are actually resisting the overall bearish market. While the broader index fell over 3% within the last 24 hours, tokens like PAXG and XAUT have increased by 0.7%, exceeding $3,100. Year-to-date, these tokens are up more than 18%, contrasting sharply with BTC’s decline of 12.5% and the 28% drop in the broader index this year so far.