Following President Trump’s announcement of the U.S. Crypto Strategic Reserve, the crypto market wiped out all of its gains in the past day, falling more than 14.7% to reach an overall evaluation of $2.64 trillion on March 4. This decline has been caused by several factors, including the correlation between U.S. stocks and cryptocurrency assets, making investors risk-averse.
Bitcoin Leads the Decline in The Crypto Market
After falling 10.80% in the past day, Bitcoin (BTC) leads other crypto assets in this slide. Another factor causing the downtrend in the crypto market is the current macroeconomic situation between the U.S. and China.
On March 4, the United States imposed tariffs on Canada, China, and Mexico. In response, Beijing imposed up to 15% tariffs on U.S. shipments, and Ottawa imposed 25% tariffs on U.S. goods valued at $107 billion.
This situation has increased crypto market uncertainty globally. The selling pattern is comparable to the market drop that followed Trump’s earlier tariff warnings on February 3 and February 28.
The decline in the cryptocurrency market is consistent with declines in other markets like the stock market. On March 3, the Nasdaq composite index fell 2.64%, while the S&P 500 lost 1.76%. The Dow Jones index lost 1.48%, marking its second straight day of declines.
Massive Liquidations Accelerate Coin Sell-Offs
The downturn in the cryptocurrency market has also been accompanied by the liquidation of positions valued at around $980 million. On-chain data shows that a total liquidation of $977.80 million occurred in the last 24 hours.
Long holdings were the most severely impacted, with $831.96 million liquidated. Liquidations on BTC and ETH holdings were $370.52 million and $193.73 million, respectively.
Today’s drop in the cryptocurrency market is part of an adjustment trend that began after it struck a crucial distribution point. Since the crash on February 3, the cryptocurrency market has been unable to break above the 200-4H EMA.
A 20%+ drop resulted from a previous effort on February 21 to regain the 200-4H EMA as support. On the weekly chart, the cryptocurrency market’s current correction is a component of its existing descending triangle pattern.
A descending triangle—a bearish continuation pattern—forms when the price reaches lower highs while keeping a flat supporting level at the bottom. When the price declines as far as the triangle’s maximum height and breaks beneath the support line with significant volume, the pattern is verified.
By March 4, the cryptocurrency market had reached the breakdown stage of the pattern and was aiming to drop to around $2.47 trillion. The 200-week EMA shows that the $1.76 trillion range may be the ultimate target if selling pressure continues.
The Crypto Market Performance after Trump’s Crypto Reserve Announcement
Just one day after Trump’s announcement of the crypto reserve gave the market a much-needed boost, the value of the top six tokens by market capitalization has decreased, with their price declines ranging from 7% to 20%.
After President Donald Trump reaffirmed his pledge to create a national cryptocurrency reserve, the cryptocurrency market capitalization soared to $3.2 trillion. Hence, many traders are puzzled about why cryptocurrency is down today despite yesterday’s rise.
Bitcoin (BTC) recovered from its previous decline, surpassing $93,000 on March 3 but dropping by almost 10%. The worst drop was seen by Cardano (ADA), which dropped over 20% to $0.81.
The mention of ADA in Trump’s crypto reserve lineup sent the token into a rally, rising over 75% to a peak of $1.13. Solana’s (SOL) price dropped more than sixteen percent during the last day to its current price of $135.97.
After the token was mentioned in Trump’s Truth Social post, the token recorded a 20% increase yesterday. Similar losses were incurred by ETH and XRP, both of which had a 13% decline in value over the previous trading day.
Furthermore, data from the Kobeissi Letter indicates that the crypto market cap has decreased by $100 billion since Trump announced the U.S. crypto reserve.
