The cryptocurrency market hit a rough patch on Friday, March 28, 2025, with Bitcoin (BTC) plunging below $84,000 after a massive $115 billion sell-off wiped out gains from earlier in the week. Trading at $83,800, Bitcoin shed 3.8% in the last 24 hours, while the broader CoinDesk 20 Index slumped 5.7%. Altcoins like Avalanche (AVAX), Near (NEAR), Polygon (POL), Uniswap (UNI), and Sui (SUI) led the losses, each dropping nearly 10%. Ethereum’s ETH wasn’t spared either, falling over 6% and hitting its weakest level against Bitcoin since May 2020.
Macro Pressures Trigger Market Rout
What sparked this downturn? A perfect storm of macroeconomic jitters. The U.S. stock market took a hit today, with the S&P 500 sliding 2% and the Nasdaq dropping 2.8%, driven by disappointing economic data. The February PCE inflation report, a key gauge for the Federal Reserve, came in hotter than expected, showing a 2.5% year-over-year rise, with core inflation ticking up to 2.8%. Consumer spending edged up just 0.4%, but when adjusted for inflation, growth was nearly flat, raising red flags about economic stagnation.
Adding fuel to the fire, the Atlanta Fed’s GDPNow model now forecasts a 2.8% contraction for Q1 2025, adjusted to 0.5% factoring in gold trade, hinting at stagflation risks. Investors are rattled, and the looming “Liberation Day” on April 2, when broad U.S. tariffs kick in under the Trump administration, only deepens the unease. These tariffs could stoke inflation further, dimming hopes for Federal Reserve rate cuts and pressuring risk assets like crypto.
Crypto Stocks and ETFs Feel the Heat
The pain rippled beyond coins. Crypto-focused stocks tanked, with MicroStrategy (MSTR), the biggest corporate Bitcoin holder, cratering 10%, and Coinbase (COIN) falling 7.7%. Ethereum’s spot ETFs underscored the bearish mood, showing zero net inflows since early March, while Bitcoin ETFs raked in over $1 billion in the past two weeks, per Farside Investors data. It’s a tale of two cryptos—Bitcoin is holding up better, but not immune to the broader sell-off.
Bitcoin’s Technical Dance: CME Gap Filled
On a technical note, Bitcoin’s drop to $83,800 filled a CME futures gap from Monday’s open—a move some traders saw coming. Historically, BTC often revisits these gaps, and today’s decline hit that $84,000-$85,000 zone. But don’t pop the champagne yet; continued macro headwinds could lower prices, especially with Bitcoin’s tight correlation to the Nasdaq in recent months.
Ethereum’s Struggles and Market Sentiment
Ethereum’s ETH, down over 6%, is losing ground fast against Bitcoin, reflecting weaker demand. The altcoin market took a bigger beating, with the CoinDesk 20 Index’s 5.7% drop signaling a risk-off shift. Hopes for a crypto recovery, buoyant earlier this week, evaporated as the market-wide rout took hold. Analysts point to stagflation fears and tariff uncertainty as key drivers, with no clear bottom yet.
The road ahead looks bumpy. With tariffs set to roll out next week, inflation pressures could keep the Fed hawkish, squeezing risk assets further. Bitcoin’s resilience is being tested, but its $83,800 level might not hold if U.S. equities keep sliding. For Ethereum and altcoins, the outlook is murkier—weak ETF flows and a shaky macro backdrop suggest more pain could be on the way. Investors are left wondering: is this a dip to buy, or the start of a deeper correction? Only time—and the Fed—will tell.
