Crypto market is going through one of the worst periods in history. We haven’t seen this kind of bloodbath since the Covid 2020 crashes which means even the bear market from 2022 and partially 2023 was not like this.
Bitcoin price is well-below $80k now, while Ethereum is trading at almost 2-year lows, below $1,500.
Here are 3 reasons why this is happening.
What you'll learn 👉
Trade Wars Hit Markets Hard
President Trump just put big tariffs on goods from China, India, and Europe. These tariffs are between 20% and 34%. This has many people worried about a global trade war. When this happens, stocks and crypto both drop.
The tariffs mess up how companies get their supplies. This makes everyone unsure about the economy. Trillions of dollars disappeared from U.S. stocks. People also sold their crypto fast. When regular markets get shaky, crypto often falls even harder.
Crypto Sell-offs and Liquidations
In just one day, over $1.3 billion in crypto trades got liquidated. This means many traders who borrowed money to buy crypto had to sell when prices dropped. Ethereum fell 12% to $1,450, the lowest since late 2023. Bitcoin dropped below $77,000.
JUST IN: $1,350,000,000 liquidated from the cryptocurrency market in the past 24 hours.
— Watcher.Guru (@WatcherGuru) April 7, 2025
Forced selling makes prices fall even more. When one person has to sell, it can start a chain reaction. Then more people have to sell too. This is why we see such big drops so fast in crypto.
Fear of Recession Spreads
Many people now think the U.S. might have a recession soon. The trade problems and poor growth numbers scare investors. When people get scared, they sell risky assets like crypto.
Stock markets in Japan and South Korea fell hard too. This shows the problem is worldwide. All the big cryptocurrencies dropped: Bitcoin, Ethereum, XRP, Solana, and Dogecoin. When fear takes over, almost everything falls at once.
What Can Traders Do in These Situations?
During times like these, it’s best to sit back and wait. Trying to make trades when everyone is panicking often leads to mistakes. Don’t make choices based on fear. Keep some money in stable assets and some in the altcoins you truly believe in. It’s probably not a good time to put in more money until things calm down.
A 10% dip in two consecutive days has only happened for the fourth time in history.
— Michaël van de Poppe (@CryptoMichNL) April 6, 2025
October 1987.
October 2008.
March 2020.
April 2025.
In 1987 & 2020, it marked the bottom.
In 2008, it took one more month to mark the bottom.
If Ethereum drops to between $1,200 and $1,300, it might be a good time to buy for the long term. History shows us something interesting about what’s happening now. A 10% drop two days in a row has only happened four times: October 1987, October 2008, March 2020, and now April 2025.
In 1987 and 2020, this marked the bottom. In 2008, prices fell for one more month before hitting bottom. We might be near the end of this crash, but no one can say exactly when it will end.
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