- Bitcoin fell below US$80k, contributing to a massive liquidation of 330,000 traders totalling nearly US$938 million as the Fear-and-Greed Index firmly remains in “Extreme Fear” territory.
- President Trump acknowledged potential “short term pain” as his administration works to “re-wire” the US economy through controversial tariff policies.
- Analysts report approximately US$5.5 trillion has been wiped from financial markets, with one describing trading as feeling like “an absolute death spiral”.
- While Trump’s tariffs are blamed as a major factor, some analysts argue the market decline stems from a broader and sudden shift in risk appetite, though many commenters directly attribute the downturn to the tariff policies.
The crypto market is still trying to find a bottom, with most major assets down on both the weekly and daily timeframe. Bitcoin, the largest crypto by market cap, lost 3% in the past day and due to its hefty price tag, this smaller percentage number makes for a big dollar impact.
Related: Crypto Poses Insolvency Risk as Desperate Aussies Take On Risky Investments And Loans
Alas, the OG fell below the US$80k (AU$127.47) mark, with the Fear-and-Greed Index firmly in Extreme Fear territory.
The crash saw over 330,000 traders being liquidated, with a total US$937.81 million (AU$1.49 billion) in total liquidations, as data from Coinglass shows. Not surprisingly, Bitcoin was the hardest hit, with US$241.94 million (AU$385.6 million) in long and US$73.01 million (AU$116.4 million) in short positions forcefully closed.
It’s Trump’s Fault, No Really, He Said So
While it is not always easy to find a reason for a market crash, in this case, things seem rather clear-cut.
Donald Trump’s tariff saga and retaliations by close US allies Canada and Mexico and contender China, have sparked fears of a trade war. And Trump and Co don’t even deny it.
The US President went on record to explain that short-term pain is possible as he and his team work to “re-wire” the US economy.
He told Fox Business’ Maria Bartiromo, that there would be a “period of transition because what we’re doing is very big”.
I hate to predict things like that. […] We’re bringing wealth back to America. That’s a big thing. […] it takes a little time, but I think it should be great for us.
Donald TrumpAnalysts Say $5.5 Trillion Market Cap Wiped Out
While experts are doubtful that Trump’s “reforms” are delivering as he promises, at least in the short term, traders have felt the impact.
Alon Rosin, who is the head of institutional equity derivatives at Oppenheimer & Co., told Bloomberg that “trading […] felt like an absolute death spiral”, following Trump’s warnings.
Related: SOL Down 16%, as Polymarket Bettors Believe Solana’s Slump to Continue in March
Analysts at The Kobeissi Letter took to X, and revealed that across financial markets, a stunning US$5.5 trillion (AU$8.76 trillion) had been wiped out in the recent crash.
But while Trump’s tariffs are an important driver, the analysts believe they’re just a “scapegoat”.
The real reason behind the downturn? Greater risk aversion.
The real reason behind the market’s decline is a sudden shift in risk appetite. We have gone from Extreme Greed to Extreme Fear in a matter of days. Positioning was so polarized, that we have swung in the complete opposite direction.
The Kobeissi LetterHowever, this could be splitting hairs a little, or be a sort of “chicken before the egg” situation. Most users disagreed with the analysts’ comments, calling them out.
Many said the exact reason for poor sentiment is that Trump’s tariff went ahead full steam.
Indeed, while the markets may have anticipated the tariffs, the severity of their impact was perhaps underestimated.
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