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Bitcoin revisited multi-month lows today as US-China trade war concerns kept investors on their toes.

A wave of liquidations pushed the overall cryptocurrency market capitalisation under the $3 trillion mark to a level last seen before November 10, right before the start of the 2024 US election rally.

When writing, the market cap stood at $2.717 trillion, down over 5% in the past 24 hours alone. 

In the past 24 hours, 241,118 traders were liquidated, with total liquidations reaching $696.38 million.

The largest single liquidation order occurred on Binance’s BTCUSDT pair, valued at $32.09 million.

The crypto fear and greed index fell to 10, its lowest since July 2022, indicating “extreme fear.”

Traders kept risk assets at bay, with the altcoin market struggling to find momentum as price action remained largely subdued amid heightened sell pressure.

Bitcoin fell over 5% to $79,367 as the market dealt with a number of bearish catalysts.

First, Bitcoin is reacting to US President Donald Trump’s recent comments, acknowledging that markets could face short-term pain due to his economic policies, including trade tariffs on China, Canada, and Mexico. 

In a Fox News interview, Trump admitted, “There could be a little disruption,” reinforcing fears that his broader economic agenda may create near-term volatility.

His remarks have amplified concerns about a prolonged trade war with China, pushing investors toward risk-off assets and triggering a sharp downturn in crypto markets.

While Trump framed his policies as laying the groundwork for long-term stability, the immediate effect has been heightened uncertainty, fueling liquidations and a drop in market sentiment.

On top of this, China’s latest retaliatory tariffs on US agricultural goods took effect today, compounding market fears while the crypto industry was already reeling from disappointment over Trump’s decision to exclude direct Bitcoin purchases from his strategic reserve plans.

Further, Bitcoin futures on the Chicago Mercantile Exchange kicked off March 10 at $82,110, sliding $4,320 from the previous day’s close of $86,430.

This marked the second-largest single-day drop this month, trailing only the record $10,350 plunge on March 3, adding to the uncertainty.

At the time of writing, Bitcoin was trading at $80,526, with bulls struggling to reclaim the $82,000 level, which had served as key support over the past month.

According to prominent analyst Arthur Hayes, Bitcoin could dip even further, potentially retesting $78,000.

If that level doesn’t hold, he sees $75,000 as the next key target.

He noted that a lot of Bitcoin options are stacked between $70,000 and $75,000, which could crank up the volatility if Bitcoin slides into that zone.

Another viewpoint was shared by Rekt Capital, who pointed to Bitcoin’s relative strength index (RSI) as a key signal to watch.

He noted that if Bitcoin forms lower lows in price while RSI prints higher lows, it could indicate a bullish divergence—a classic reversal signal.

Rekt Capital also highlighted that in the current bull cycle, Bitcoin has typically bounced whenever the daily RSI dipped below 28.

When writing, the RSI stood at 33.2, suggesting that while Bitcoin isn’t at historical bounce levels just yet, it could be getting close.

#BTC Bitcoin has made yet another Lower High on the Daily There’s no denying that But throughout this entire cycle, whenever Bitcoin would reach 28 or lower on the RSI… Bitcoin’s price would either bottom or be between -2% to -8% away from a bottom $BTC #Crypto #Bitcoin

Traders are also awaiting key economic reports this week, including the US Consumer Price Index on March 12 and the Producer Price Index on March 13.

If inflation comes in higher than expected, it could signal that the Federal Reserve may hold off on rate cuts, keeping financial conditions tight and pressuring risk assets like Bitcoin.

Conversely, a cooler-than-expected inflation reading could reignite optimism for monetary easing, potentially providing some relief to the crypto market.

Despite the broader downturn, the altcoin market rose slightly over the previous day from $1.09 billion to nearly $1.15 trillion as of press time.

Only a handful of altcoins managed to retain their gains, with only a few low-cap coins achieving double-digit profits, such as SuperRare (RARE), IOST (IOST), and B3 (B3).

Meanwhile, most of the top 99 cryptocurrencies remained in the red, extending their weekly losses.

Source: CoinMarketCap

The weak momentum in the broader altcoin market coincided with a lack of interest among altcoin traders, as the Altcoin Season Index stood at 24 when writing, which means that the majority of altcoins were underperforming compared to Bitcoin.

The post Why is Bitcoin down today? $696M in liquidations and economic fears hit crypto appeared first on Invezz

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