Bitcoin Plummets 9% to $75,000 as US Tariffs Spark Weekend Sell-Off

Bitcoin and other cryptocurrencies are often praised for offering around-the-clock trading access, but that constant availability may have contributed to a steep sell-off over the weekend following the latest US trade tariff announcement. Unlike stocks and traditional financial instruments, Bitcoin (BTC) and other cryptocurrencies enable payments and trading opportunities 24/7 thanks to the accessibility of blockchain technology.

After a record-breaking $5 trillion was wiped from the S&P 500 over two days — the worst such drop on record — Bitcoin remained above the $82,000 support level. But by Sunday, the asset had plummeted to under $75,000. Sunday’s correction may have occurred due to Bitcoin being the only large tradable asset over the weekend, according to Lucas Outumuro, head of research at crypto intelligence platform. “There was a bit of optimism last week that Bitcoin might be uncorrelating and fairing better than traditional stocks, but the [correction] did accelerate over the weekend,” Outumuro said, adding: “There’s very little people can sell on a Sunday cause most markets are closed. That also enables the correlation because people are panicking and Bitcoin is the largest asset they can sell over the weekend.”

Outumuro noted that Bitcoin’s weekend trading can also have upside effects, as prices often rally in calmer conditions. Bitcoin initially “decoupled” from traditional assets after the US stock market saw a $3.5 trillion drop as the Trump administration’s “reciprocal tariffs” could significantly affect the economy and lead to higher inflation. However, Bitcoin fell below $75,000 as the panic from traditional markets spread to cryptocurrencies over escalating trade war concerns.

Adding to Bitcoin’s 24/7 trading mechanics, numerous Bitcoin holders are overleveraged, according to Blockstream CEO. Speaking during a fireside chat, he said: “The problem with the Bitcoin market is most of the people who are into Bitcoin are all in. So they've got no money. And worse, some of them are leveraged or overleveraged and it trades 24/7.” “On a weekend, there’s not much volume. So you have a worse risk of rapid sort of flash crashes or flash dips that get filled in again,” he said. He also reiterated his belief that Bitcoin will rival gold over the next decade as a hedge against rising monetary inflation.

Bitcoin's 24/7 liquidity, while a significant advantage, can also be a double-edged sword during periods of global market turmoil. The continuous availability of Bitcoin for trading means that it can experience significant drawdowns, particularly on weekends, as it becomes one of the few major global assets available for de-risking around the clock. This unique characteristic can lead to heightened volatility and price swings, which are not always correlated with broader market movements. A prominent figure in the crypto industry has highlighted that Bitcoin's price swings are more attributable to its high liquidity and 24/7 trading nature rather than market correlation. This perspective underscores the importance of understanding the underlying factors driving Bitcoin's price movements, especially during times of global economic uncertainty. The unpredictable nature of economic measures, such as tariffs, can exacerbate market instability, making Bitcoin's liquidity both an asset and a liability. Investors must navigate these challenges carefully, recognizing that while Bitcoin's continuous trading can offer opportunities, it also presents risks that need to be managed strategically.