Crypto Markets Plunge 7% as U.S. Tariff Concerns Spark Sell-Off

Cryptocurrency markets experienced a significant downturn on Monday, April 7th, as global risk sentiment shifted due to renewed U.S. tariff concerns. This shift led to a sharp decline in prices, with Bitcoin and Ether leading the drop. Bitcoin fell approximately 7% from late Sunday levels to an early Monday low near $76,900, while Ether touched $1,540, its lowest intraday point since October 2023. Both assets pared some losses afterward but remained under pressure.

The downturn reflects investor reactions to rising geopolitical and macroeconomic pressures, including President Trump reaffirming commitment to extensive tariffs over the weekend. U.S. equity futures also declined ahead of the market open, indicating a broader risk-off sentiment. Because crypto markets operate 24/7, they often react first to shifting global sentiment, as explained by Charlie Sherry, Head of Finance at BTC Markets.

Derivative markets reflected the sharp negative shift, with nearly $758 million in bullish crypto positions liquidated over the last 24 hours, the highest amount in roughly six weeks. This indicates significant pain for leveraged long traders. In the options market, activity leaned heavily toward puts (downside protection), signaling heightened demand for hedging against further declines.

Despite hopes for decoupling, the price action confirms crypto’s strong correlation with traditional risk assets like the Nasdaq 100 remains intact. Digital assets continue to function as leading indicators for broader risk asset movements. Following the drop, crucial support levels come into focus. FalconX’s McNulty warned that support at $75,000 for Bitcoin and $1,500 for Ether could be tested again if bearish sentiment persists. Holding these levels will be critical for preventing deeper declines as the trading week begins.

Ethereum, in particular, has shown continued weakness, trading below the $1,800 mark as bulls struggle to regain momentum. This lack of upward movement suggests that the cryptocurrency may face additional challenges in the coming weeks. The recent drop in prices has been attributed to various factors, including trade tensions and global market volatility, which have triggered a wave of liquidations across the crypto market.

According to analysts, the $52,000 target for Bitcoin aligns with key technical support levels, such as the 200-day moving average, which could act as a floor if selling intensifies. This level is seen as a critical point that could either stabilize the market or lead to further declines. The recent price action has been dominated by bearish momentum, with Bitcoin dropping 7% to a 25-day low below $80,000. This decline has been exacerbated by trade tensions, which have triggered $597 million in liquidations and contributed to a bearish outlook for the weekend.

In summary, the recent plunge in cryptocurrency prices has highlighted key support levels for Bitcoin and Ether, with analysts warning of potential further declines if these levels are breached. The market remains volatile, with trade tensions and global market conditions contributing to the bearish sentiment. However, some digital assets have shown resilience, providing potential opportunities for investors in the near future.