The pioneering crypto asset dipped below $91,000 for the first time since November amid weak appetite for digital assets.
Bitcoin and the altcoin market turned pessimistic after US President Donald Trump announced he would proceed with tariffs on Canada and Mexico in March.
Bitcoin and traditional markets are becoming more correlated, and “a similar stagnation in traditional financial markets” caused by “macro-driven uncertainty” is a significant factor influencing the stalled cryptocurrency market.
The S&P 500 dropped 2.3 percent, while the Nasdaq Composite lost about 4 percent.
Ethereum also experienced a sharp decline, falling by almost 11% on the day to $2.4k at the time of writing. The second-largest cryptocurrency by market capitalization has experienced a volatile few days following last Friday’s theft of over $1.4 billion worth of Ethereum and related tokens from cryptocurrency exchange Bybit.
The market capitalization of crypto assets is down 8% today, falling below $2.9 trillion after over $220 billion was wiped out in a single day. The markets are at their lowest point since mid-November, wiping out all gains made since Donald Trump won the election.
The overall market valuation threatens longer-term support levels. A drop below $3 trillion would break these levels and potentially end the bull market.
The lack of momentum needed for a sustained breakout has resulted in a period of contraction and consolidation across nearly all major crypto assets.
According to CoinGecko, Bitcoin dropped more than 4 percent on the last day, plummeting to less than $91,000, its lowest since late November. Coinglass data revealed 284,555 traders had been liquidated for the day, bringing the total liquidations to $884 million. The largest single liquidation order happened on the Bitmex exchange – XBTUSD, worth $10 million.
In addition, the Bitcoin Fear and Greed Index has plummeted to its lowest level since September, reaching “extreme fear” at 25 on Tuesday.
The overall cryptocurrency market collapsed by 8%, from over $3.31 trillion to approximately $3.09 trillion.
In a press conference with French President Emmanuel Macron, Trump claimed that his proposed 25% tariffs on Canada and Mexico “are going forward on time, on schedule,”which coincided with the market decline.
This month, the demand for cryptocurrency assets declined as the broader US economy faced difficulties due to declining consumer confidence and growing inflation expectations.
According to a February University of Michigan Consumer Survey, “growing concerns about inflation and economic uncertainty” that could slow spending caused US consumer sentiment to drop 10% in January to a 15-month low.
Markets predict President Donald Trump’s numerous proposed tariffs “added to inflationary pressures” and have reversed some of the gains made in the last two years to reduce inflation.
Solana in a Bearish Market
Solana is the worst performer among major altcoins, down by about half its value since it peaked in January.
- Solana’s high selling pressure can be partially explained by the change in market sentiment toward cryptocurrencies, but other factors also influence Solana’s bearish run.
- The FUD surrounding the FTX estate’s subsequent unlocking of Solana tokens may be the reason for the largest markdown in the prices of the sixth-largest altcoin. On Saturday, March 1, FTX will release 11.2 million SOL tokens, which are currently valued at over $17 billion.
The selling pressure in the aftermath of such an event worries analysts and investors because it could lead to extreme volatility and market contagion based on its systemic place in the meme coin market.