Crypto Market Plummets 6.5% as Bitcoin Drops 4.5%

Dogecoin (DOGE) and ether (ETH) experienced a significant decline of 9% over the past 24 hours, following a 4.5% drop in bitcoin (BTC), which fell below $80,000. This downturn triggered a widespread sell-off, resulting in the liquidation of $700 million in long positions.

Leveraged traders who had bet on a rally were particularly affected, with $420 million in BTC long positions and $150 million in ETH long positions being liquidated. Additionally, $30 million in DOGE long positions were also wiped out. Solana (SOL) saw an 8% decrease, while XRP slipped by 7%, contributing to a broader market decline with the CoinDesk 20 (CD20) index falling by more than 6.5%.

Open interest in BTC futures decreased by 7% to $45 billion, indicating forced exits due to margin calls. This market turmoil comes as investors adopt a risk-off approach, influenced by the diminishing likelihood of a Federal Reserve interest rate cut following a stable jobs report and expectations of a similar February CPI report to January's reading.

Analysts suggest that traders may reduce their risk exposure until the U.S. economic situation becomes clearer and the need for a rate cut becomes more apparent, which may not occur until later in the year. The recent losses extend a two-week downward trend, exacerbated by global market sentiment, with the S&P 500 down 2% and the Nasdaq off 3% at the start of the week. This sell-off was driven by renewed fears of the impact of U.S. trade tariffs set to take effect next month and concerns of a potential recession following a recent interview with Donald Trump.

This was the largest one-day drop in U.S. equities since September 2022, with the so-called ‘Magnificent 7’ cohort losing $830 billion in market capitalization. Additionally, a stronger U.S. dollar and a hawkish Federal Reserve signal in late February, indicating fewer rate cuts in 2025, have further dampened hopes for a short-term recovery. Safe-haven assets like gold and the Japanese yen have also seen increased demand.

Despite the market turmoil, there are some positive indicators. The Crypto