TLDR
- Bitcoin fell below $84,000 after a $115 billion market-wide sell-off erased weekly gains
- Ethereum dropped to its weakest price against Bitcoin since May 2020, with ETF inflows stalled
- The crypto crash coincided with poor U.S. economic data and inflation concerns
- Fears about upcoming “Liberation Day” tariffs on April 2 compounded market anxiety
- Technical indicators suggest more downside potential, though support may emerge at $70-75K for Bitcoin
The cryptocurrency market suffered a major setback on Friday, March 28, 2025, as Bitcoin plunged below $84,000. The sudden downturn erased all gains made earlier in the week.
Bitcoin, which was trading near $88,000 just a day before, tumbled to $83,800. This represents a 3.8% decline over the past 24 hours.
The broader crypto market fared even worse. The CoinDesk 20 Index, which tracks the performance of major cryptocurrencies, fell by 5.7%.
Several major cryptocurrencies experienced even steeper drops. Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) all posted losses of nearly 10%.
The market-wide sell-off wiped out approximately $115 billion in total cryptocurrency value, according to TradingView data. Every asset in the CoinDesk 20 Index recorded losses during this period.
Ethereum was particularly hard hit, dropping over 6%. This continued its downward trend against Bitcoin, reaching its weakest relative price compared to the largest cryptocurrency since May 2020.
Ethereum’s struggle is partly tied to its spot ETFs. These exchange-traded funds have failed to attract any net inflows since early March.
In contrast, Bitcoin ETFs have seen over $1 billion in inflows over the past two weeks, according to Farside Investors data. This highlights the diverging investor sentiment between the two leading cryptocurrencies.
Bad Day for Stocks Also
The crypto market’s decline happened alongside a bad day for U.S. stocks. The S&P 500 fell 2% while the tech-heavy Nasdaq dropped 2.8%.
Crypto-related stocks also suffered heavy losses. MicroStrategy (MSTR), the largest corporate Bitcoin holder, closed 10% lower, while crypto exchange Coinbase (COIN) fell 7.7%.
The sell-off appears to be triggered by concerning economic data. The February Personal Consumption Expenditure (PCE) inflation report showed a 2.5% year-over-year increase in the price index.
Core inflation came in at 2.8%, slightly above market expectations. Consumer spending showed only modest growth of 0.4%, suggesting headwinds for economic growth.
The Federal Reserve of Atlanta’s GDPNow model now projects the U.S. economy to contract by 2.8% in the first quarter of 2025. This has sparked fears of stagflation—a toxic mix of high inflation and stagnant economic growth.
Trump’s Tariffs
Another factor weighing on markets is the upcoming implementation of broad U.S. tariffs. The Trump administration plans to enact these tariffs on April 2, dubbed “Liberation Day.”
From a technical perspective, Bitcoin’s drop may be related to filling a price gap. This gap formed between Monday’s open and the previous week’s close on the Chicago Mercantile Exchange futures market.
Historically, Bitcoin tends to revisit such gaps, which were around the $84,000-$85,000 level. Some analysts had predicted this move earlier in the week.
Despite the current downturn, some market experts remain cautiously optimistic about the longer-term outlook. Joel Kruger, market strategist at LMAX Group, noted several positive trends in the sector.
These positive factors include crypto-friendly policies in the U.S. and more traditional financial firms entering the industry. Kruger suggested that any further price drops “should be well supported into the $70-75k area.”
However, fear has gripped the market. The crypto fear and greed index has dropped to 25, indicating extreme fear among investors ahead of Trump’s tariffs.
Economists have cautioned that these tariffs could lead to a recession. This might erase some of the economic growth achieved during the Biden administration.
Ethereum faces additional challenges beyond market sentiment. It has been losing market share in key sectors like decentralized finance, non-fungible tokens, and decentralized exchanges.
These losses have been to layer-1 chains like Sonic and Berachain, as well as layer-2 networks like Base and Arbitrum. This competitive pressure adds to Ethereum’s price difficulties.
Technical analysis suggests Ethereum could face further downside. The weekly chart shows it formed a triple-top pattern at $4,000 with a neckline at $2,130.
Ethereum broke below this neckline earlier this month before retesting it. This break-and-retest pattern is often seen as a bearish continuation signal.
The current price action suggests Ethereum could drop to $1,537, its lowest point from October 9. A move above the resistance level at $2,131 would invalidate this bearish outlook.
