Crypto Market Plummets 8.6% as Geopolitical Tensions and Rising Interest Rates Spark Sell-Off

The crypto market experienced a significant downturn on Monday, with Bitcoin, Ethereum, and XRP prices plummeting. This sell-off was driven by a combination of macroeconomic concerns and geopolitical tensions, particularly the announcement of new tariffs by former U.S. President Donald Trump and the subsequent retaliation from China. This geopolitical uncertainty led to a broader sell-off, with investors quickly moving to liquidate their positions in cryptocurrencies.

The sell-off was particularly pronounced in the early Asian trading session, where Bitcoin's price slipped below $80,000 and Ethereum's price dropped to around $1,520. XRP, the fourth-largest cryptocurrency by market capitalization, also faced significant selling pressure, with its price crashing below $2. This market-wide outflow was driven by aggressive selling and growing caution among traders, who were wary of the increasing market uncertainty.

The broader sell-off was exacerbated by rising interest rates, which sparked fears of instability across financial markets. This macroeconomic concern added to the already volatile environment, leading to a further decline in cryptocurrency prices. Ethereum, for instance, dropped below $1,600, while XRP also saw a significant drop, falling by 8.6% and triggering panic across exchanges.

The market sell-off continued into the early Sunday session, with XRP's price battling to maintain momentum as selling pressure returned to the market. The overall crypto market capitalization fell, with the majority of the crypto assets, including XRP, in red. XRP was approaching $2, reaching intraday lows of $2.08. The drop followed profit-taking after XRP rebounded for three days at a stretch from April 3, reaching highs of $2.17 consequently. At the time of writing, XRP had fallen 1.67% in the last 24 hours to $2.09 and was down 4.09% weekly.

The Relative Strength Index (RSI) at 42 increased the risk of a break below $2. If this occurred, XRP might form a bearish head-and-shoulders pattern. XRP eyes support at $1.84, which coincides with the daily SMA 200, but if that level is broken, the slide could continue to $1.77 and then $1.27. Buyers faced a difficult task in order to avoid a breakdown. They must quickly drive the price over the 50-day simple moving average at $2.34 to pave the way for a relief rally to $2.6 and beyond.

In the past 24 hours, the crypto market recorded heavy losses, with total forced liquidations of $1 billion, whereby the majority were long traders. As the Western financial markets gradually open on Monday, more losses are expected in the crypto market. Moreover, the wider Asian markets have set a bearish momentum, amid heightened fear of further capitulation.

Bitcoin price led the wider altcoin market – led by Ethereum (ETH) and XRP – in a significant drop during the past 24 hours, largely because of the trade war fears. After China retaliated with reciprocal tariffs to the U.S. reciprocal tariffs, more nations, especially the European Union and Japan, are expected to announce similar measures this week. Consequently, crypto investors have accelerated profit-taking, while some traders took huge losses. Moreover, technical analysis shows the crypto market is slated to drop further in the coming days.

The crypto market recorded a forced liquidation of about $1.01 billion in the past 24 hours, whereby the long trades amounted to around $868 million. With over 323k traders impacted in the past 24 hours, including whale investors, the odds of a long squeeze increased, leading to further losses.

The crypto market has been trapped in a bearish outlook since the second inauguration of U.S. President Donald Trump. Bitcoin price has already retested a macro reversal pattern, thus aiming for around $60k next. Ethereum price has already closed below a weekly rising logarithmic trend established in late 2023. As a result, the bearish sentiment has the upper hand for Ether, amid low demand from institutional investors. Meanwhile, XRP price slipped below the crucial support level above $1.9 in the past 24 hours to trade at about $1.77 at the time of this writing. As a result, more bearish sentiment for XRP will likely continue in the coming days.

The wider crypto market has been reacting to macroeconomic concerns, especially amid the ongoing global trade wars. As a result, the odds of a recession in the United States significantly increased, as economists predicted rising inflation.