TLDR
- Major cryptocurrencies including XRP, SOL, and DOGE have crashed over 20% in a severe market correction
- Bitcoin has fallen below $75,000 as the broader crypto market shows signs of “bear market behavior”
- The sell-off is linked to President Trump’s recent tariff announcements affecting Canada, Mexico, and China
- Technical supports have been breached across multiple cryptocurrencies, suggesting potential for further downside
- Traders anticipate continued market weakness when US markets open, with $1 billion in liquidations already recorded
The cryptocurrency market is facing its worst day in months as prices crashed across the board on Monday morning. Bitcoin dropped below $75,000 while other popular digital assets like XRP, Solana (SOL), and Dogecoin (DOGE) plummeted more than 20% in just 24 hours.
The market downturn has wiped out billions in value, with the CoinDesk 20 index slumping 12%. This broad-based decline indicates a major shift in investor sentiment as money flows out of riskier assets.
XRP has fallen to $1.70, breaking below its 200-day moving average, which many traders consider a crucial technical indicator. Solana dropped under the $100 mark, now sitting 64% below its all-time high after breaching its 50-day moving average.
Dogecoin traders saw the popular meme coin tumble to $0.13, joining the market-wide retreat. Technical indicators show DOGE entering oversold territory with its Relative Strength Index (RSI) dropping to 28.
Trade War Fears Rattle Markets
The primary catalyst for the sell-off appears to be escalating trade tensions following President Donald Trump’s recent policy announcements. Trump imposed 25% tariffs on imports from Canada and Mexico while doubling the levy on Chinese goods to 20%.
These aggressive trade measures have prompted concerns about retaliation from these major trading partners. Reports indicate China is considering stimulus packages to offset the economic impact of these tariffs.
Hedge fund manager Bill Ackman has characterized the situation as an “economic nuclear war,” highlighting the severity of the current trade dispute. The uncertainty has caused investors to seek safer assets like gold and the Japanese yen.
Cardano’s ADA token has also suffered in the market rout, dropping 12% to 55 cents. This decline pushed ADA below its 50-day simple moving average, which had provided reliable support since mid-March.
Technical analysts point to concerning chart patterns forming across multiple cryptocurrencies. XRP displays a bearish head-and-shoulders formation, while ADA shows a descending triangle pattern – both typically precede further price declines.
Market Outlook Remains Grim
Trading experts are warning that the worst may not be over when U.S. markets open. Jeff Mei, COO at cryptocurrency exchange BTSE, noted: “Historically, crypto markets tend to front-run stock markets over the weekend, and this morning’s Asia market declines seem to have reinforced this belief.”
“We expect crypto markets to dip once US markets open,” Mei continued. He suggested that recovery prospects depend on whether major economies can negotiate tariff relief in the coming days.
Several smaller nations including Vietnam, Cambodia, and Taiwan have already moved to ease tensions by pledging to reduce their own tariffs or increase investment in the United States. However, Mei believes similar actions from larger economies like Japan or China would be necessary to restore market stability.
Augustine Fan from SignalPlus described current market conditions as typical bear market behavior. “All the signs suggest that macro markets are now in ‘bear market’ mode, rallies are to be sold, and investors will be forced to accept this new reality,” Fan explained.
The technical outlook for Cardano suggests potential further weakness. If current levels fail to hold, ADA could decline toward $0.40, representing an additional 30% drop from present prices.
For Dogecoin, technicians have identified a “death cross” formation on the 4-hour chart, with the 50-period simple moving average crossing below the 200-period simple moving average. This pattern often signals continued downward momentum.
The selling pressure has triggered massive liquidations approaching $1 billion as leveraged positions were forced to close. Total cryptocurrency market capitalization has declined by approximately 20% this year alone.
Traders are closely monitoring diplomatic developments related to the tariff situation. Any signs of compromise between the United States and its trading partners could potentially stabilize markets in the short term.
Resistance levels to watch include $2.20 for XRP, 60 cents for ADA, and $0.21 for DOGE. Reclaiming these levels would be necessary to counter the current bearish trend, though many analysts consider this unlikely given the macroeconomic headwinds.
The cryptocurrency market has historically shown high correlation with traditional risk assets during periods of economic uncertainty. The coming days may prove crucial in determining whether this correction develops into a more extended bear market phase.
Market participants remain wary about near-term prospects as both technical and fundamental factors point to continued weakness. With trading volumes elevated and sentiment indicators deeply negative, volatility is expected to remain high.
