Crypto Market Plummets 10% as Bitcoin Drops 9% Amid Tariff Fears

The crypto market has experienced a significant downturn, with Bitcoin and various altcoins plummeting, causing widespread concern among investors. The Crypto Fear & Greed Index has plummeted into "extreme fear" territory, reflecting the market's current sentiment. This dramatic shift has resulted in billions of dollars being wiped from the market overnight, leaving traders on edge about what the future holds.

The sell-off was initiated by escalating fears of a global tariff war, which investor Bill Ackman described as an "economic nuclear war." This uncertainty has shaken markets, causing Bitcoin to drop by over 9% and major altcoins to decline by up to 14%. XRP, Cardano (ADA), and Dogecoin (DOGE) have all fallen below crucial support levels as of Monday morning.

According to data from Coinmarketcap, the Fear and Greed Index has dropped to 17, indicating extreme fear. Bitcoin's value has tumbled to $75,000, causing the total crypto market cap to decrease by nearly 10% to $2.4 trillion. Berachain experienced the most significant plunge, crashing by 21% to a record low of $4.6, now down over 50% from its peak. Top tokens like AAVE, Litecoin, Lido DAO, Maker, Movement, and Ethena also saw sharp declines, losing more than 15% of their value.

Over $1 billion in crypto positions were liquidated as markets crashed, with Bitcoin and Ethereum accounting for $638 million combined. More than 324,000 traders were affected, including one Bitfinex user who lost a staggering $23 million. The Fear & Greed Index's drop to 17 underscores the extreme fear gripping the market.

Charlie Sherry from BTC Markets noted that the drop is not surprising given that markets are typically illiquid on Sundays. This means that a few large sales can cause prices to fall rapidly. Edul Patel, co-founder and CEO of Mudrex, observed that investor sentiment is currently weak, with the Fear and Greed Index approaching "Extreme Fear." However, he suggested that there may be a silver lining as U.S. federal agencies are expected to reveal their crypto holdings later today, and a strong disclosure could spark a much-needed relief rally.

Federal agencies are required to disclose their Bitcoin and crypto holdings to Treasury Secretary Scott Bessent by Monday, according to a White House official. These reports could provide new insights into the government’s digital asset exposure. Some traders believe that a Bitcoin breakout could be imminent, despite the current market turmoil. BitMEX co-founder Arthur Hayes suggested that while global tariffs are unsettling markets, they might actually trigger a Bitcoin rally.