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:
As US tariff wars escalated, nearly $980 million was wiped off the crypto market in 24 hours.
Investors are risk-off amid the continued correlation between US equities and crypto assets.
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:
US tariffs against Mexico, China and Canada went into effect March 4.
Beijing responded with tariffs of up to 15% on US exports.
Ottawa hit back with 25% tariffs on $107 billion worth of US goods.
The tit-for-tat measures have intensified global market uncertainty, prompting crypto traders to take profits.
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:
The S&P 500 dropped by 1.76% on March 3, while the Nasdaq composite index declined by 2.64%.
The Dow Jones index clocked its second consecutive daily loss, losing 1.48%.
24-hour performance of US equities Source: Financial Visualizations
“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
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:
A total of $977.80 million in liquidations has been recorded in the past 24 hours.
Long positions took the hardest hit, with $831.96 million liquidated.
Crypto market liquidation heatmap. Source: CoinGlass
Bitcoin and Ethereum were the biggest casualties, with $370.52 million and $193.73 million in liquidations, respectively.
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:
The crypto market has failed to decisively break above its 200-4H EMA (blue wave) since the Feb. 3 crash.
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
As the market retests the 200-4H EMA, signs of strong selling sentiment are emerging.
The repeated rejections at this key level suggest bears remain in control, keeping the market under pressure.
On the weekly chart:
The crypto market’s ongoing correction appears to be part of its prevailing descending triangle pattern.
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
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.
As of March 4, the crypto market had entered the pattern’s breakdown stage, eyeing a decline toward $2.47 trillion.
If selling pressure persists, the 200-week EMA (~$1.76 trillion) could become the ultimate downside target.
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.
