The crypto market wiped out all profits from President Trump’s announcement of US Crypto Strategic Reserve, plunging more than 14.7% in 24 hours to $2.64 trillion on March 4th.
Top cryptocurrencies and 24-hour performance. Source: Messari
Several factors have contributed to the latest decline in crypto prices, including:
As the US tariff war escalated, about $980 million was wiped out of the crypto market in 24 hours.
Investors are risk-off amid the ongoing correlation between US stocks and crypto assets.
Hard resistance at 50 weeks of SMA that can curb recovery efforts.
Bitcoin leads crypto market drop amid the escalation of the trade war
Bitcoin (BTC), which accounts for around 60% of the total crypto market, is leading the decline after plunging 8.80% in the past 24 hours.
What I Know:
US tariffs on Mexico, China and Canada came into effect on March 4th.
Beijing responded to US exports with tariffs of up to 15%.
Ottawa fought back with 25% tariffs on US goods worth $107 billion.
The strict measures have strengthened the uncertainty in the global market, and have led crypto traders to make profits.
Sales behaviour resembles Trump’s previous tariff threat, the decline that occurred after the market defeats on February 3 and February 28th.
The decline in Crypto Market is consistent with a decline in the overall risk-on market.
Key Points:
The S&P 500 fell 1.76% on March 3, while the Nasdaq Composite Index fell 2.64%.
The Dow Jones Index recorded second straight day losses, losing 1.48%.
24-hour performance of US stocks: Financial visualization
“Given the strong link between $BTC and US tech stocks, the long-term recovery in Bitcoin depends on the higher trends of the NASDAQ100,” argues analyst Stephen Rubeck.
Related: Atlanta Fed model forecasts GDP will shrink by 2.8% in the first quarter: Trumpcession
After Nvidia officially entered the bear market, the Bitcoin and Crypto markets are also hits, Roubec said.
Bitcoin and the stock market correlation. Source: Stefan Luebeck
Large-scale liquidation accelerates sales
The decline in Crypto Market is further coinciding with the liquidation of positions worth almost $980 million.
What I Know:
A total of $977.8 million has been recorded in the last 24 hours.
The long position was hit hardest, with $831.96 million being liquidated.
Crypto Market Liquidation Heatmap. Source: Coinglass
Bitcoin and Ethereum were the biggest casualties, with $370.52 million and liquidation respectively at $193.73 million.
When a long position is settled, the trader’s holdings are automatically sold, lowering the market supply and propulsion price.
The market cannot break through major distribution areas
From a technical standpoint, today’s crypto market decline is part of a revision trend that began after reaching key distribution areas.
Key Points:
The Crypto market has not been able to decisively break 200-4H EMA (Blue Wave) since the February 3 crash.
The final attempt to regain the 200-4H EMA in support on February 21st failed, leading to a decline of over 20%.
Performance chart with a total crypto market capitalization of 4 hours. Source: TradingView
As the market retests the 200-4H EMA, signs of strong sales sentiment are emerging.
This repetitive rejection at this critical level suggests that the bear remains controlled and is under pressure on the market.
Weekly Chart:
The ongoing revision of the crypto market appears to be part of its general downward triangle pattern.
The descending triangle is a bearish continuation pattern, formed when the price drops highs while maintaining a flat support level at the bottom.
Total crypto market capitalization weekly performance chart. Source: TradingView
This pattern is seen when prices drop below support levels and drop as much as the maximum height of the Triangle in large quantities.
As of March 4th, the crypto market had entered the pattern’s failure phase, focusing on a decline to $2.47 trillion.
If sales pressure continues, a 200-week EMA (~$1.76 trillion) could be the ultimate negative side target.
Holding 50 weeks of EMA (~$2.63 trillion) as support allows for bounce towards the lower trendlines of the pattern, along the $3 trillion level.
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
