The cryptocurrency market experienced a sharp decline on Friday, erasing the gains made earlier in the week as Bitcoin plunged to $83,800. The broader market followed suit, with the CoinDesk 20 Index dropping 5.7%. Meanwhile, Ethereum’s ETH hit its weakest level against Bitcoin since May 2020, reflecting the broader bearish sentiment that swept through risk assets.
Key Points to Know:
- Bitcoin, which had been hovering just below $88,000, fell to $83,800, a 3.8% drop in just 24 hours.
- The CoinDesk 20 Index, which tracks the performance of major cryptocurrencies, saw a 5.7% decline, with Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) experiencing losses close to 10%.
- Ethereum’s ether (ETH) extended its downtrend against Bitcoin, losing over 6% in value. Its price relative to Bitcoin dropped to its lowest point since May 2020.
- The downturn in the crypto market coincided with a sell-off in U.S. stocks, exacerbated by disappointing economic data and concerns over inflation and stagflation. The S&P 500 and Nasdaq indexes both dropped sharply, pulling crypto-related stocks down with them.
- A release of the February Personal Consumption Expenditures (PCE) inflation data showed inflationary pressures above expectations, indicating potential economic slowdowns.
- The impending implementation of U.S. tariffs—referred to as “Liberation Day” by the Trump administration—added to investor uncertainty, further affecting both traditional and digital asset markets.
The broader market wipeout led to a $115 billion loss in cryptocurrency market value, according to TradingView data. This market correction, alongside a weakening economic outlook, wiped out investor optimism that had previously fueled a recovery. 
Bitcoin’s drop helped fill a gap in CME futures that had been left when the price opened lower on Monday. According to CoinDesk senior analyst James Van Straten, this price drop toward $84,000 had been anticipated due to Bitcoin’s historical pattern of revisiting such gaps.
Despite the ongoing market correction, analysts remain cautiously optimistic. Joel Kruger, market strategist at LMAX Group, noted that the correction may find support around the $70,000–$75,000 range. He also pointed to positive trends, such as increasing crypto-friendly policies in the U.S. and the growing presence of traditional financial institutions in the cryptocurrency market, which could bolster the sector later in 2025.
Looking ahead, while the broader market faces challenges from macroeconomic concerns, some experts believe that the crypto market may be positioning itself for future growth once the current volatility settles.
