Table of Contents
- A brutal Bitcoin and altcoin correction under pressure
- Cascade of Massive Liquidations
- A correlation to Traditional Markets and Capital Outflows
- Inflation and Economic Uncertainty: A Challenging Climate for Cryptos
The crypto market is facing another wave of extreme volatility, further unsettling an already fragile landscape amid macroeconomic uncertainties. Solana has plummeted by 14%, while XRP and Dogecoin have dropped over 8%, and Bitcoin has fallen below $90,000, now around $88,000. This sharp decline, driven by widespread liquidations, raises concerns about the resilience of these assets under global economic pressures. The key question now is whether this downturn is a temporary correction or the start of a larger trend reversal.
A brutal Bitcoin correction and Altcoins under pressure
The crypto market is experiencing intense turbulence, with Solana (SOL) plunging 14% in a single day and extending its weekly losses to over 20%. This sharp decline is part of a broader liquidation wave affecting XRP, Dogecoin, and Ethereum, all down more than 8%. The trend is mirrored in the CoinDesk 20 index, which tracks the sector’s largest market capitalizations, showing a daily drop of over 7%.
Bitcoin has fallen below the $90,000 mark for the first time since November, raising concerns of a potential bearish breakout after three months of consolidation between $90,000 and $110,000. This decline adds to market tensions, already strained by the lack of clear bullish signals. However, Jeff Mei, COO of the BTSE exchange, tempers the pessimism, suggesting that the current bearish sentiment may be overstated and that upcoming macroeconomic decisions could pave the way for a rebound.
Cascade of Massive Liquidations
Amid the prevailing panic, liquidations are surging. In just 24 hours, nearly $1 billion in positions have been wiped out, according to CoinGlass data. Among them, $277 million comes from long positions on Bitcoin, highlighting a market blindsided by the abrupt downturn. Altcoins have not been spared either, as a wave of forced sales accelerates the correction.
This phenomenon is not new; in a crypto market heavily driven by leverage, liquidations tend to amplify downward movements. However, beyond this technical factor, the current correction aligns with a broader economic backdrop weighing on risk assets.
Bitcoin has been range-bound between $90,000 and $110,000 for nearly three months, struggling to establish a lasting bullish trend.
The Bitfinex Alpha report from February 24, 2025, underscores this, stating that
“Bitcoin remains at a critical turning point after nearly 90 days of consolidation. The momentum required for a sustained bullish breakout has been lacking, resulting in a phase of contraction and consolidation across nearly all major crypto assets.”
Bitfinex analysts
In the past 24 hours, Bitcoin has fallen over 6.7%, hitting a low just below $90,000 for the first time since late November, according to CoinGecko. Meanwhile, the total crypto market capitalization has dropped by 8%, sliding from over $3.31 trillion to approximately $3.09 trillion.
A Correlation to Traditional Markets and Capital Outflows
The recent crypto plunge isn’t driven solely by internal factors. The market is increasingly correlated with traditional stock indices, which have also seen declines in recent days. The S&P 500 has fallen 2.3% over the past week, while the Nasdaq is down 4%, reflecting a broader shift toward risk aversion. This trend has slowed capital inflows into crypto, which were already weakening due to declining institutional interest.
A clear sign of this is the performance of Bitcoin ETFs, which saw net outflows of $552.5 million over the past week. The cooling of institutional demand—once a major driver of the market’s 2024 rally—is a crucial signal for investors who had hoped these products would provide sustained price support.
Inflation and Economic Uncertainty: A Challenging Climate for Cryptos
Although this correction appears severe, it is not entirely surprising. Inflationary pressures and the economic slowdown have led to a shift in capital towards safer assets.
The sentiment of economic slowdown dominates the markets, with strengthened correlations between stocks, bonds, and cryptos. This explains why we are observing this synchronized correction across all assets.
The announcement of new U.S. tariffs on Canadian and Mexican imports, confirmed by President Donald Trump during his speech with Emmanuel Macron, adds another layer of uncertainty. ‘This stagnation in traditional markets has reverberated in cryptos,’ explain analysts from Bitfinex, noting that the U.S. economy is experiencing a period of weakness, marked by declining consumer confidence and slowing growth.
The massive liquidations that rocked Bitcoin, Solana, and XRP highlight the crypto market’s vulnerability to macroeconomic factors. While some analysts view this correction as overblown and expect a rebound, others caution that uncertainty around monetary policy calls for prudence. This situation reflects a market at a crossroads, balancing the optimism of long-term investors with the anxiety of short-term speculators. The coming days will be crucial: a rebound could restore confidence, while continued declines could intensify pressure across the sector.
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