The market is in freefall – a brutal sell-off has ripped through crypto, leaving liquidations, fear, and deep red screens in its wake. BTC has crashed below USD 80,000, falling 7% on the day already while the Fear & Greed Index has plunged to an extreme low of 10/100, signalling outright panic. What started as a slow bleed last week has turned into a full-blown liquidation cascade, sparked by a weaker-than-expected S&P 500 Global services PMI and renewed tariff fears, which sent risk assets spiralling lower. Even deep-pocketed bids from the likes of Saylor were not enough to stem the tide.
This is not just about BTC—there is blood across the board with other majors posting similar losses on the day in excess of 7%.
We are still staring into the abyss, and it looks like there is more pain to come before any meaningful recovery can kick in.
One outlier in the carnage? LTC, which has shown relative resilience despite the sell-off this week. While most majors are printing fresh lows, LTC is still holding above its weekly bottom around USD 106 and even staged a massive 20% bounce this week before giving back some of those gains overnight. The move has been fuelled by ETF speculation and its reputation as “digital silver,” a narrative that continues to gain traction.
But for now, bounces remain fragile, sellers are in control, and the market still looks vulnerable to another flush lower.
Macro: Growth Concerns, Rate Cuts in Focus, and Nvidia’s Key Earnings Report
FX markets largely ignored the broader risk-off move at the start of the week. However, all that has changed now. Trump’s tariff confirmation—now explicitly targeting the EU—has flipped that script with USD posting strong gains across the board with even the likes of EUR rolling over hard, nearing session lows at sub 1.0400 despite a boost from the German elections last weekend.
Whatever tailwinds the EUR had from the election outcome have been overshadowed by tariff risks. The latest escalation threatens to derail EU policy plans, adding another layer of uncertainty to an already fragile macro backdrop. With risk assets still on edge and month-end flows in play, FX vol could spike hard in the coming sessions.
On the equities side, Nvidia’s blowout earnings managed to put a temporary floor under the markets, dodging what could have been an even uglier leg lower for risk assets. But let us not get ahead of ourselves—sentiment remains fragile. The S&P 500 has been under consistent pressure this week, and U.S. consumer confidence just hit an eight-month low.
Any hopes for a recovery were quickly derailed by Trump’s latest tariff clarification, which came in far more punitive than expected, sending risk assets tumbling again. The details:
- 4 March: New tariffs on Mexico and Canada
- 2 April: Reciprocal tariff measures remain in full force
- 2 April: China hit with an additional 10% tariff
This latest escalation all but guarantees further volatility across FX, equities, and crypto. With the risk appetite already on edge and month-end flows adding another layer of unpredictability, expect more whipsaw price action heading into the weekend.
On the deck today: Alongside month-end price dynamics, markets will also be closely watching the Core PCE Index, the Fed’s preferred inflation gauge. With risk assets already on edge and rate cut expectations shifting, this data will be pivotal in shaping the next move.
Looking Ahead: Fear Dominates, But Is This a Setup for a Rebound?
While the recent price action has been brutal, a confluence of factors could soon turn supportive for risk assets:
- US Yields Have Peaked: Bond yields are rolling over, and the dollar is easing, both of which improve financial conditions and market liquidity.
- Rate Cuts Are Being Repriced: Market expectations for Fed rate cuts are creeping back in, particularly with signs of a cooling labour market.
- China Stimulus: China remains in deflation, and further stimulus measures could be unleashed as the dollar weakens, providing an additional liquidity boost.
- Potential End to the Russia-Ukraine War: Growing speculation over a resolution in the Russia-Ukraine conflict could remove a key geopolitical risk premium from markets.
While growth is slowing, not collapsing, the conditions may still favour BTC’s long-term trajectory. Institutional adoption, improving regulatory clarity, and BTC reserve dynamics still support the structural bull case—but in the near term, extreme fear is in control.
Will BTC find footing at the current levels or does more pain lie ahead before a real bounce? Either way, this liquidation event will be one to remember—and history tells us that deep selloffs often set the stage for powerful reversals.
For now, expect volatility, expect uncertainty, and above all, expect the unexpected.
Read more News here.
