The crypto market erased all gains from President Trump’s US Crypto Strategic Reserve announcement, plunging by over 14.7% in 24 hours to reach $2.64 trillion on March 4.
Top cryptocurrencies and their 24-hour performances. Source: Messari
Several factors have contributed to the latest drop in crypto prices, including:
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As US tariff wars escalated, nearly $980 million was wiped off the crypto market in 24 hours.
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Investors are risk-off amid the continued correlation between US equities and crypto assets.
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Stiff resistance at 50-weekly SMA that could stifle recovery efforts.
Bitcoin leads the crypto market drop amid trade war escalation
Bitcoin (BTC), which makes up about 60% of the overall crypto market, is leading the decline after plunging 8.80% in the last 24 hours.
What to know:
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US tariffs against Mexico, China and Canada went into effect March 4.
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Beijing responded with tariffs of up to 15% on US exports.
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Ottawa hit back with 25% tariffs on $107 billion worth of US goods.
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The tit-for-tat measures have intensified global market uncertainty, prompting crypto traders to take profits.
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The selling behavior is similar to the declines that occurred after Trump’s previous tariff threats, namely the Feb. 3 and Feb. 28 market rout.
The crypto market’s drop aligns with declines across risk-on markets.
Key points:
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The S&P 500 dropped by 1.76% on March 3, while the Nasdaq composite index declined by 2.64%.
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The Dow Jones index clocked its second consecutive daily loss, losing 1.48%.
24-hour performance of US equities Source: Financial Visualizations
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“Given the strong link between $BTC and US tech stocks, Bitcoin’s long-term recovery depends on the NASDAQ100’s ability to trend higher,” analyst Stefan Luebeck argues.
Related: Atlanta Fed model predicts GDP to shrink 2.8% in Q1: Trumpcession
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In the aftermath of Nvidia officially entering a bear market, Bitcoin and the crypto market are also taking a hit, Luebeck said.
Bitcoin and stock market correlation. Source: Stefan Luebeck
Massive liquidations accelerate the sell-off
The crypto market’s decline has further coincided with liquidations of nearly $980 million worth of positions.
What to know:
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A total of $977.80 million in liquidations has been recorded in the past 24 hours.
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Long positions took the hardest hit, with $831.96 million liquidated.
Crypto market liquidation heatmap. Source: CoinGlass
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Bitcoin and Ethereum were the biggest casualties, with $370.52 million and $193.73 million in liquidations, respectively.
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When long positions are liquidated, traders’ holdings are automatically sold, increasing market supply and driving prices lower.
Market fails to break through key distribution area
From a technical perspective, the crypto market’s decline today is part of a correction trend that started after hitting a key distribution area.
Key points:
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The crypto market has failed to decisively break above its 200-4H EMA (blue wave) since the Feb. 3 crash.
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The last attempt to reclaim the 200-4H EMA as support on Feb. 21 failed, leading to a 20%+ decline.
TOTAL crypto market cap four-hour performance chart. Source: TradingView
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As the market retests the 200-4H EMA, signs of strong selling sentiment are emerging.
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The repeated rejections at this key level suggest bears remain in control, keeping the market under pressure.
On the weekly chart:
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The crypto market’s ongoing correction appears to be part of its prevailing descending triangle pattern.
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A descending triangle is a bearish continuation pattern, forming when the price makes lower highs while maintaining a flat support level at the bottom.
TOTAL crypto market cap weekly performance chart. Source: TradingView
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The pattern is confirmed when the price breaks below the support level with high volume and drops by as much as the triangle’s maximum height.
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As of March 4, the crypto market had entered the pattern’s breakdown stage, eyeing a decline toward $2.47 trillion.
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If selling pressure persists, the 200-week EMA (~$1.76 trillion) could become the ultimate downside target.
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Holding the 50-week EMA (~$2.63 trillion) as support may enable a bounce toward the pattern’s lower trendline, aligning with the $3 trillion level.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.