The cryptocurrency market experienced a sharp decline on Monday, erasing over $110bn in value as Bitcoin (BTC) and altcoins dropped to their lowest levels in weeks. This sudden downturn followed a period of stability and was driven by growing economic concerns and unsettling developments within the crypto asset sector.
Leveraged positions lost $882 million as a result of the sell-off, making it one of the biggest liquidations in recent weeks. Over 284,000 crypto traders were forced to exit their trades, with those holding long positions suffering the most severe losses.
Bitcoin’s value plummeted from $96,954 to a monthly low of $90,924, leading to long liquidations amounting to $256 million before staging a partial recovery. Ether also had a steep decline, plunging to $2461—a more than 10% decline—wiping out $176 million in long positions.
The biggest percentage decline occurred in Solana, which fell 13% to $136, resulting in long liquidations of $83 million and short-position liquidations of $8 million.
Cardano’s CEO, Charles Hoskinson, voiced his frustration over investor reactions, suggesting that many had lost sight of the bigger picture. He compared the market’s behavior to that of a child throwing a tantrum, criticizing the panic-driven sell-off.
The market’s volatility comes as President Donald Trump reinstates 25% tariffs on imports from Canada and Mexico. Earlier optimism had stemmed from a temporary suspension of these trade barriers, but their return has reignited concerns about economic stability.
Investor confidence has also been shaken by the scandal involving insider trading of Solana-based meme coins. The controversy led to substantial fund withdrawals from Solana, heightening anxiety across the broader market.
At the same time, Ether and Bitcoin ETFs have seen heavy outflows, further pressuring prices. Data from SoSoValue indicates that Ether ETFs saw $85.3 million in withdrawals over the last two weeks, while BTC ETFs saw the largest exit since its introduction of $1.14 billion.
Moreover, the market is still grappling with the impact of a recent $1.5 billion cyberattack on the Bybit exchange, making selling pressure worse as traders scramble to secure their assets.
The crypto greed and fear index, which has fallen to 27, solidly in the “fear” range, indicates that worry has taken hold. A month earlier, the measure stood at 61, indicating a strong degree of optimism. A reading below 41 implies that market activity is dominated by widespread anxiety, whereas a reading over 41 often denotes positive or neutral sentiment.
Major crypto exchanges like Coinbase Global Inc. (NASDAQ: COIN) are likely to watch the trading activity on their platforms to see if the market sentiment changes soon from the current sell-off to a more bullish stance.
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