Bitcoin prices dipped below $80,000 as reflected in the bearish market sentiment this past weekend. The global markets saw investments totalling to $590 million being liquidated, in light of the apprehensions about former President Donald Trump’s proposed tariffs and increasing geopolitical tension.
The Bitcoin-long short ratio fell to 0.89 suggesting that the market participants are leaning more towards ‘going short’ with over 53% short positions in the market. This shift has made it evident that market skepticism about Bitcoin’s short-term direction has intensified. Notably, this came at a time when traditional markets – Nasdaq 100, S&P 500, and Dow Jones – reported steep losses and entered the correction phase, mirroring their weakest weekly performance since 2020.
The first quarter-end saw Bitcoin registering an 11.7% loss, depicting its weakest Q1 performance since 2014, with the broader crypto market shrinking by 2.45%. As a result, the total market capitalization reduced to $2.59 trillion where Bitcoin continued to dominate the share with 62%, followed by Ethereum with 8%.
Owing to the selloff on Sunday, the crypto world saw long positions totaling to $252.79 million being liquidated, constituting a majority stake of $207 million. Ethereum traders alone were responsible for long liquidations nearing $72 million. Be ecpected remain volatile whilst tracking global liquidity shifts, with American markets reopening on Monday.
Possible future strain remains upon investors as Federal Reserve Chair Jerome Powell has predicted that Trump’s tariff plans could stimulate inflation further whilst decelerating economic growth, leading to a potential risk of stagflation. This tricky economic condition sees ineffective policy tools where economic stimulation increases inflation and price control measures limit growth.