It’s getting bloody out there.
Bitcoin, Ethereum, XRP ($2.25), and a host of other cryptocurrencies have plummeted as much as 14% on Tuesday, tracking a broader global slump in stock markets.
Crypto exchanges saw some $1.5 billion in liquidations as leveraged traders were blidnsided by the shakeout, according to CoinGlass.
“Bitcoin’s place remains far out on the periphery as an ultra risk-on asset to be readily sold at the very hint of troubles ahead,” Petr Kozyakov, cofounder and CEO at payment infrastructure platform Mercuryo, told DL News.
The biggest loser among the 10 largest cryptocurrencies is Solana. Since January 19, SOL ($139.29) has slid roughly 50% and trades at $138.
And the S&P 500 and Nasdaq look set for another down day after falling 0.5% and 1.2% yesterday, respectively.
So, is the rally finished?
“It’s premature to declare the end of the bull market,” Nathan Chiron, chief revenue officer at decentralised cloud computing platform iExec, told DL News. “Cryptocurrency markets are inherently volatile, and corrections are not uncommon.”
Still, others urge caution as Bitcoin traded below $88,900 for the first time since November.
“Do not buy the dip yet,” Geoffrey Kendrick, an analyst with Standard Chartered, said. “A move to the low 80s is on.”
Experts point to five factors driving the current crypto battering — and issued a timeline for when they expect markets to turn around.
Trump tariffs
“Crypto’s taking a hit from big-picture economic pressures and US tariffs targeting Canada and Mexico,” Dominick John, an analyst at Kronos Research, told DL News.
President Donald Trump declared Monday that hefty tariffs on Canada and Mexico will go forward.
If executed, goods coming across both borders would be subject to a 25% import tax.
Canadian President Justin Trudeau and Mexican President Claudia Sheinbaum announced plans to issue retaliatory tariffs should Trump advance.
Tariffs have alarmed economists concerned about rising inflation because tariffs typically raise the price of consumer goods.
Concerns of a trade war with close trading partners have also roiled markets.
Walmart wobbles
Walmart, a bellwether of US consumer sentiment, issued a stark warning.
The company suggested continued growth into 2026 will be slower than expected, sending the stock almost 7% lower and marking the biggest slide since 2022.
Walmart is “in an uncertain time,” John David Rainey, Walmart’s chief financial officer, said on an investors call.
That uncertainty stems from potential rising prices for the grocery giant’s suppliers in Canada, Mexico, and China.
Fed flips dovish
Tariffs move hand in hand with inflation, a subject Federal Reserve Chair Jerome Powell has wrangled with since the pandemic.
Fed minutes from January suggest there is new concern that Trump’s immigration and trade policies could blunt the central bank’s fight to beat back prices.
Additionally, the Consumer Price Index, which measures the change in price of a basket of goods and services, hit a nine-month high in February, icing out any hopes of additional rate cuts.
These factors — as well as more evidence of disinflation in the market — indicate the Fed is in no hurry to continue lowering rates.
The Fed Board of Governors voted unanimously to keep interest rates at their current levels.
Bybit hack
The crypto industry has also been roiled by its largest-ever hack.
On February 21, Bybit, the third-largest crypto exchange by volume traded, was robbed of almost $1.5 billion in Ethereum.
Security researchers quickly accused hacker cell Lazarus Group, which is affiliated with North Korea, as the culprits, specifically.
Though Bybit was quick to announce that funds were safe, and that it had secured 80% of the lost funds via a bridge loan, the event rattled investor confidence.
Milei memecoin
Argentine President Javier Milei’s catastrophic memecoin launch also weighs heavily on the industry.
Just hours after launching the Libra token on February 14, the token soared to $4 billion before being vapourised and leaving investors in the lurch.
“History has shown that moments of uncertainty often present opportunities.”
Ilya Kalchev, an analyst at the crypto platform Nexo
Political opponents have called for the impeachment of Milei, while the crypto industry razed the polluting effects of the latest memecoin mania.
“A grift too far,” Jill Gunter, the co-founder of Espresso Systems, a cross-chain network, told DL News. “Memecoins are pure extraction. This is just damage.”
What’s next?
As markets run red, industry insiders remain as bullish as ever.
“History has shown that moments of uncertainty often present opportunities,” Ilya Kalchev, an analyst at the crypto platform Nexo, told DL News.
“With Bitcoin testing key levels and broader macro conditions in flux, those with a long-term perspective may see this as a moment to position strategically.”
Chiron said to monitor Bitcoin’s dominance — or how much market share the top cryptocurrency occupies.
“If it rises alongside BTC ($89,133.55)’s price, it could indicate renewed confidence in the market,” he told DL News. “If it rises while prices are dropping, it may signal risk-off sentiment, with investors retreating from altcoins into BTC as a safer play.”
Regarding a timeline, Hong Yea, cofounder and CEO of crypto exchange GRVT, told DL News the market may need to wait until Spring for a turnaround.
“This dip from January’s peak doesn’t likely signal the bull market’s end,” he said. “Volatility is par for the course in crypto, and this can be seen as a consolidation phase, with a potential rebound by March or April 2025.”
Standard Chartered’s Kendrick also said to look at spot Bitcoin exchange-traded funds outflows as a sign of when the bottom has been hit.
He said Bitcoin ETFs will likely have a day of over $1 billion in outflows before things bounce back.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at [email protected].
