Cryptocurrencies extended their losses on Monday as a broader sell-off in risk assets, including equities, pressured the market. Bitcoin (BTC) briefly surged to around $84,000 earlier in the day, potentially driven by Strategy’s $21 billion fundraising plan, but later fell below $80,000, marking a 3.8% decline over 24 hours. Ether (ETH), the native token of the Ethereum blockchain, dropped below $2,000 at one point, trading near its lowest level since November 2023, down approximately 4%.
The broader crypto market also suffered significant losses. The CoinDesk 20 Index, which tracks a diverse set of digital assets, fell 5%, while major altcoins, including Solana (SOL), Cardano (ADA), Aptos (APT), Avalanche (AVAX), and NEAR, recorded declines ranging between 7% and 10%.
The downturn coincided with a weak start for U.S. equity markets. The Nasdaq opened the week with a sharp 3% drop, while the S&P 500 declined by 2%, reflecting growing concerns over macroeconomic instability. The decline in traditional financial markets appeared to exacerbate risk-off sentiment in the crypto space, with investors reducing exposure to digital assets.
Crypto-related equities also took a hit. Strategy (MSTR), the largest corporate holder of Bitcoin, and cryptocurrency exchange Coinbase (COIN) both lost more than 10% in Monday’s trading session, adding to the sector’s woes.
Market analysts pointed to the absence of immediate bullish catalysts as a key factor behind the slump. The recent digital asset summit at the White House and President Donald Trump’s Bitcoin reserve executive order provided temporary support. Still, the lack of fresh developments has left markets vulnerable to broader economic uncertainties. Concerns about a potential tariff war and a slowing U.S. economy have further dampened sentiment.
Trump, in an interview with Fox News on Sunday, described the economy as being in a “transition” phase and did not rule out the possibility of a recession this year.
Looking ahead, traders expect continued volatility in crypto markets, particularly as digital assets maintain a strong correlation with equities.
“Until crypto finds a new narrative, we’re likely to see an increased correlation between BTC and equities in the near term,” hedge fund QCP said in a Telegram broadcast.
“Both risk assets are currently trading near their recent lows, and with tariff risks still looming, volatility could pick up heading into key U.S. macro data releases.”
As market participants assess the broader economic landscape, the coming weeks could prove crucial in determining whether cryptocurrencies can decouple from traditional financial markets or remain closely tied to macroeconomic shifts.
Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.
