Bitcoin dropped below $80,000 on Monday, hitting $77,459 before slightly recovering to $79,085. The drop marks a 14% decline over the past week, with Ethereum also plunging to $1,810, its lowest since November 2023. Other major cryptocurrencies faced sharp losses, with Solana down 9% to $121, Cardano falling 10% to $0.69, and Dogecoin losing 13% to trade at $0.16.
The sell-off comes amid broader financial market declines. The Nasdaq fell over 3%, and the S&P 500 dropped 1.8% as traders reacted to economic uncertainty. Investors are bracing for upcoming inflation reports, including the Producer Price Index and Consumer Price Index, which could indicate whether inflation remains a concern.
Crypto markets have been under pressure for weeks, with institutional investors cutting exposure to digital assets for the fourth consecutive week. Digital asset investment products saw $876 million in outflows last week, bringing the four-week total to $4.75 billion. Bitcoin alone accounted for $756 million in outflows, bringing the total assets under management (AUM) in digital funds down to $142 billion, the lowest since mid-November 2024.
Market sentiment has turned bearish, with the Crypto Fear & Greed Index dropping to 17, a sharp decline from its highs of over 92 last year. This shift has triggered a wave of liquidations, with over $195 million wiped out in just four hours, including $161 million in long positions. The sell-off intensified as traders scrambled to cut losses, further accelerating Bitcoin’s decline.
Economic uncertainty has been fueled by President Donald Trump’s recent tariff policies and his comments over the weekend. In a Sunday interview with Fox News, Trump declined to rule out a recession, stating there would be a “period of transition” as the economy adjusts to his tariffs on Canada, Mexico, and China. His administration’s shifting stance on tariffs has already caused market volatility in recent weeks.
Trump’s policies on cryptocurrency have also contributed to the market’s downturn. At Friday’s White House Crypto Summit, he confirmed plans for a Strategic Bitcoin Reserve, stating that the government will use seized BTC but will not make additional purchases. Instead of boosting confidence, this announcement led to further uncertainty and sell-offs in the crypto market.
Financial analysts note that risk appetite is shifting, with increasingly volatile swings in both crypto and stock markets. “The moves in crypto and stocks are becoming increasingly one-sided. Red days are DEEP red days and vice-versa, yet another sign of changing risk appetite. Sentiment is the ultimate driver of price,” wrote the Kobeissi Letter.
With inflation data and further economic policy decisions expected later this week, both traditional and digital markets remain on edge.
