Why Is Crypto Market Going Down? Bitcoin, Ethereum Lead $840M Sell-Off

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The cryptocurrency market is reeling from a severe downturn, with widespread losses across major digital assets. Since April 5, the total crypto market cap has dropped by over 11%, plunging from $2.65 trillion to approximately $2.46 trillion by April 6. The sharp decline intensified over the weekend, with a 7.16% drop, followed by an even steeper 12.5% fall in just 24 hours. This wave of red has left investors questioning: Why is the crypto market going down? And more importantly—what comes next?

Bitcoin and Ethereum Hit Hard in Market Downturn

At the center of this sell-off are the two largest cryptocurrencies by market capitalization: Bitcoin (BTC) and Ethereum (ETH).

Bitcoin, once trading near its all-time high, now sits at $74,902.53—still about 45.5% below its peak. Over the past day alone, BTC lost nearly 9.5%, signaling weakening investor confidence despite its status as a digital gold hedge.

Ethereum fared worse, dropping 17.3% in 24 hours. As the backbone of decentralized finance (DeFi) and smart contracts, ETH’s sharp correction reflects broader risk-off sentiment across the blockchain ecosystem.

These declines aren’t isolated—they reflect a systemic shift driven by macroeconomic forces beyond crypto itself.

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Altcoins Plunge Amid Risk-Off Sentiment

While Bitcoin and Ethereum anchor the market, altcoins have absorbed the brunt of the downturn. Since April 5, the broader altcoin market has declined by 14.29%, with smaller-cap tokens suffering even more—down 16.47% when excluding the top 10.

Major players saw double-digit losses:

Even relatively stable ecosystems like BNB Chain weren’t spared, with BNB shedding 9.9%. The collapse in investor appetite for higher-risk assets highlights a classic “flight to safety” behavior often seen during global uncertainty.

$840 Million in Long Positions Liquidated

One of the most alarming signs of market stress is the surge in liquidations. In the last 24 hours alone, over $840 million in long positions were wiped out—primarily from leveraged traders betting on price increases.

What makes this especially concerning is that 86% of futures market positions were bullish before the crash. This extreme skew meant that when prices began to dip, cascading margin calls triggered automatic sell-offs, accelerating the downward spiral.

Breakdown of liquidation losses:

Such massive forced exits amplify volatility and deepen bearish momentum, creating a feedback loop that can prolong recovery.

Global Markets Shake as Trade Tensions Rise

This crypto downturn didn’t occur in a vacuum. It coincides with a broader financial market selloff sparked by escalating global trade tensions.

Aggressive tariff policies—widely attributed to former U.S. President Donald Trump’s economic strategy—have rattled investors worldwide. Referred to by some analysts as an “economic nuclear war,” these measures have disrupted supply chains and raised fears of stagflation.

Stock markets across the globe posted steep declines in the past week:

In just 24 hours:

As traditional equities tumble, risk assets like cryptocurrencies often follow suit. With investor sentiment turning bearish across asset classes, crypto—still viewed by many as a high-beta speculative play—is particularly vulnerable.

Billionaire investor Bill Ackman has publicly urged policymakers to pause and reassess the economic implications of these aggressive trade moves, warning that unchecked escalation could trigger deeper global instability.

FAQ: Understanding the Crypto Market Downturn

Q: Why are cryptocurrencies falling so sharply?
A: The current drop is driven by macroeconomic factors—particularly global trade tensions and rising risk aversion. As traditional markets fall, investors pull capital from volatile assets like crypto, triggering widespread selling.

Q: Is this crash similar to previous bear markets?
A: While every cycle differs, this event mirrors past corrections where external shocks (like regulatory actions or geopolitical events) spark panic. However, unlike earlier crashes rooted in internal crypto issues (e.g., exchange failures), today’s sell-off stems largely from macro forces.

Q: Should I sell my holdings during this downturn?
A: That depends on your investment strategy and risk tolerance. Historically, markets recover after sharp corrections. Long-term holders often view dips as accumulation opportunities rather than exit signals.

Q: Can crypto decouple from stock market trends?
A: In theory, yes—cryptocurrencies were designed to operate independently of traditional finance. But in practice, especially during periods of global uncertainty, they tend to move in tandem with equities due to shared investor bases and sentiment drivers.

Q: How do liquidations affect crypto prices?
A: When leveraged long positions are liquidated, exchanges automatically sell assets to cover margin deficits. This increases sell pressure, driving prices lower and potentially triggering more liquidations—a cycle known as a “liquidation cascade.”

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Core Keywords Driving This Analysis

This article integrates the following core keywords naturally to align with search intent and SEO best practices:

These terms reflect what users are actively searching for during market turbulence—offering clarity, context, and actionable insights.

Looking Ahead: What’s Next for Crypto?

While the immediate outlook remains uncertain, history suggests that sharp corrections often precede renewed growth phases. Regulatory clarity, institutional adoption, and technological advancements continue to strengthen the long-term fundamentals of blockchain ecosystems.

For now, patience and disciplined risk management are key. Traders should avoid emotional decisions, set stop-loss levels, and consider dollar-cost averaging into positions during extended downturns.

Volatility is inherent to crypto—but so is opportunity.

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