Nearly $980 Million Wiped Off Market in 24 Hours

The cryptocurrency market has suffered a significant downturn, erasing all gains from President Trump’s US Crypto Strategic Reserve announcement. Over the past 24 hours, the market has dropped by 14.7%, reaching $2.64 trillion on 4 March.

Several factors have contributed to this sharp decline, including mounting tensions from the ongoing US tariff wars. With global uncertainty on the rise, investors have adopted a risk-off approach, leading to widespread sell-offs.

Bitcoin Leads Market Decline Amid Trade War Uncertainty

Bitcoin, which constitutes around 60% of the crypto market, has been at the forefront of this downturn. The flagship cryptocurrency has plummeted by 8.80% in the past 24 hours, pulling the entire market lower.

Top cryptocurrencies and their 24-hour performances. Source: Messari

The latest market dip follows the implementation of fresh US tariffs against Mexico, China, and Canada on 4 March. In response, Beijing imposed tariffs of up to 15% on US exports, while Ottawa retaliated with 25% tariffs on $107 billion worth of American goods. These tit-for-tat measures have heightened global market instability, prompting many crypto traders to secure profits.

This selling trend mirrors previous declines following Trump’s tariff-related threats, particularly the market routs on 3 February and 28 February.

Stock Market Correlation Fuels Further Losses

The crypto market’s downturn is in line with broader declines across risk-on assets. The S&P 500 fell by 1.76% on 3 March, while the Nasdaq Composite Index dropped 2.64%. The Dow Jones also recorded its second consecutive daily loss, sliding by 1.48%.

24-hour performance of US equities Source: Financial Visualizations

Analyst Stefan Luebeck noted that Bitcoin’s long-term recovery remains closely linked to the performance of US technology stocks. “Given the strong correlation between Bitcoin and the Nasdaq 100, its recovery will depend on whether tech stocks can regain upward momentum,” Luebeck stated.

Nvidia’s recent entry into bear market territory has further compounded the sell-off, adding to Bitcoin’s woes.

Massive Liquidations Accelerate Sell-Off
The market’s decline has been exacerbated by nearly $980 million worth of liquidations. Long positions were hit hardest, accounting for approximately $831.96 million of the total liquidations. Bitcoin and Ethereum experienced the largest losses, with $370.52 million and $193.73 million in liquidations, respectively.

When long positions are liquidated, traders’ holdings are automatically sold, increasing supply and putting further downward pressure on prices.

Technical Factors Signal Continued Market Weakness
From a technical perspective, the crypto market’s downturn is part of a broader correction trend that began after reaching a key distribution area. The market has repeatedly failed to break above its 200-4H EMA (Exponential Moving Average) since the 3 February crash.

An attempt to reclaim this level on 21 February was unsuccessful, triggering a decline of over 20%. The repeated rejections at this resistance level indicate that sellers remain in control, keeping prices under sustained pressure.

Descending Triangle Pattern Suggests Further Downside Risks
On the weekly chart, the crypto market appears to be following a descending triangle pattern—a bearish continuation signal. This pattern forms when an asset makes lower highs while maintaining a flat support level at the bottom.

TOTAL crypto market cap four-hour performance chart. Source: TradingView

A breakdown from this structure typically results in a price decline equal to the triangle’s maximum height. As of 4 March, the crypto market had entered this breakdown phase, with projections pointing toward a further decline to $2.47 trillion.

If selling pressure continues, the 200-week EMA, currently around $1.76 trillion, could become the next significant support level. However, holding the 50-week EMA at approximately $2.63 trillion could enable a temporary bounce back toward the $3 trillion level.

With ongoing trade tensions and technical signals pointing toward further volatility, investors are bracing for more turbulence in the days ahead.