Until macro stability returns and ETF inflows resume, crypto markets, analysts believe, are likely to remain defensive
Crypto markets extended their decline as a sharp correction deepened amid thin liquidity, escalating geopolitical tensions, and a broader risk-off move across global markets. The flagship digital asset fell below the key $75,000 level to its lowest level since April 9 last year, while Ethereum hovered near $2,200 as a wave of liquidations hit leveraged positions during low-liquidity weekend trading.
Analysts attributed the sell-off to a combination of macroeconomic uncertainty, weakening global risk sentiment, and significant institutional outflows from US spot Bitcoin ETFs. Geopolitical concerns, according to the CoinSwitch Markets Desk, added to the pressure, with reports of an explosion at Iran’s Bandar Abbas port and fears of a potential US-Iran escalation prompting a flight to safety and weighing on risk assets, including cryptocurrencies.
Market sentiment was further strained by concerns over US monetary policy after President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, a move widely perceived as hawkish that boosted the US dollar and intensified selling pressure in crypto markets.
“Markets reacted negatively to US President Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, a perceived hawk expected to favour tighter monetary policy. The move fuelled a rally in the US dollar and sell-offs in risk assets, including crypto. Simultaneously, geopolitical tensions, reports of an explosion at Iran’s Bandar Abbas port, and concerns over a possible US-Iran escalation triggered a broader flight to safety, further weighing on digital assets,” said Riya Sehgal, research analyst, Delta Exchange.
ETF outflows, liquidations weigh on Bitcoin
Echoing similar views, Akshat Siddhant, lead quant analyst at Mudrex, said, “Recent outflows of over $1.4 billion from Bitcoin ETFs have further added to selling pressure, while the weekend volatility triggered nearly $2.6 billion in liquidations, effectively clearing excessive leverage from the system. This reset improves the market structure. Importantly, institutional conviction remains intact, with Strategy signalling further Bitcoin accumulation.”
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Siddhant, however, expects a revival in sentiment once US equity markets open for trading today.
Amid this, the digital token Bitcoin briefly slipped below the $75,000 level to $74,551 before recovering to trade above $76,000. At last check, the cryptocurrency was trading at $76,180, down 3.45 per cent over the past 24 hours, with trading volumes of $62.08 billion, according to CoinMarketCap data. The digital token has fluctuated in a wide range of $74,551.33-$79,142.52 during the last 24 hours.
From a technical standpoint, Bitcoin, according to Sehgal, faces resistance at $80,000-$82,000, with downside targets near $72,000-$70,000. Siddhant, on the other hand, believes that currently near $76,600, BTC faces resistance at $85,500, with a decisive break opening the path toward $90,000.
Ethereum underperforms, altcoins turn negative
The sell-off was more pronounced in Ethereum (ETH). At last check, ETH was trading with a loss of 8.24 per cent at $2,247.57, with a 24-hour trading volume of $48 billion, CoinMarketCap data showed. It has fluctuated between $2,166 and $2,448 over the past 24 hours. ETH remains over 54 per cent down from its peak of $4,953 recorded on August 5 last year, according to CoinMarketCap.
Analysts, meanwhile, remain more cautious on Ethereum’s outlook. “ETH faces selling pressure below $2,500, risking a retest of $2,000,” said Sehgal.
The negative sentiment extended to the altcoin space as well. Among other popular cryptocurrencies, XRP (XRP), Solana (SOL), and BNB (BNB) were trading lower by 5.17 per cent, 4.57 per cent, and 3.76 per cent, respectively. Among others, CMC20 (CMC20), HYPE (HYPE), and Cardano (ADA) were showing losses of 4.49 per cent, 2.52 per cent, and 3.65 per cent, respectively.
Until macro stability returns and ETF inflows resume, crypto markets, analysts believe, are likely to remain defensive. Traders may expect choppy consolidation or further downside before a sustainable recovery can begin.
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