2025-04-08T07:19:04.000Z

The cryptocurrency market has recently witnessed a notable retreat, returning to levels reminiscent of early November last year. This period was marked by a surge in market activity following Donald Trump's electoral victory, which catalyzed a breakthrough beyond a critical resistance level.

Bitcoin, often regarded as the flagship cryptocurrency, has managed to claw its way back toward the $80,000 mark. This resurgence comes after a brief dip below $75,000 on Monday, prompting a rally among several major altcoins. Notably, cryptocurrencies such as Dogecoin (DOGE), BNB Chain’s BNB, XRP, and Cardano’s ADA experienced gains of up to 10%, providing some respite from the losses incurred in the prior 24 hours. The broad-based CoinDesk 20 index, which tracks the performance of the top 20 cryptocurrencies, saw an almost 9% uptick, reflecting a broader recovery trend.

Overall, the total cryptocurrency market capitalization has retreated to levels seen in early November of last year, underscoring how macroeconomic factors, including political events, can significantly influence market dynamics.

In parallel, equity markets also experienced a dramatic fluctuation late on Monday. Speculation surrounding a potential respite from tariffs caused the S&P 500 index to soar by over 7%. However, these gains were short-lived, as the White House quickly labeled the rumors as “fake news,” leading to a steep decline in the index shortly thereafter.

The volatility in the crypto market has been exacerbated by a staggering $1.2 billion in liquidations within crypto-tracked futures on Monday alone. Major cryptocurrencies were reported to have slumped more than 20% at one juncture, setting the stage for a corrective bounce as traders moved to close short positions and reversed previously aggressive selling strategies, as highlighted by CoinDesk.

Traders are now closely monitoring Bitcoin's price movements, searching for signals that might indicate favorable buying opportunities. Despite the heightened uncertainty stemming from ongoing tariff conflicts, some analysts remain hopeful. Jupiter Zheng, a partner at HashKey Capital, expressed optimism that investors seeking safe havens could potentially buy the dip on Bitcoin, especially if it demonstrates relative strength compared to traditional assets in the near term. “While global markets are experiencing record sell-offs, Bitcoin has also seen declines but remains relatively stable,” Zheng noted in a recent Telegram message.

Alex Kuptsikevich, chief market analyst at FxPro, provided further insights, stating that the crypto market appeared to be “emotionally oversold.” He acknowledged that while a rebound was on the horizon, the requisite catalysts for a true reversal of fortunes were still absent. Kuptsikevich also pointed out that current crypto market sentiment had plunged into the extreme fear zone, resting at a fear index of 23. This level is significantly higher than what is observed in traditional equities, indicating a more organized sell-off within the cryptocurrency space. “This does not mean that cryptocurrency investors are more confident about the future; rather, it signals that the sell-off here is more organized, making it more dangerous,” he warned in an email.