Is the crypto market really on the decline with endless losses?

Author: 1912212.eth, Foresight News

On March 31, Bitcoin's daily chart has seen four consecutive declines, sliding from $87,000 to $81,000. Ethereum appears even worse, with its daily chart showing seven consecutive declines, dropping from around $2,100 to $1,800. Solana is hovering around $130, while many altcoins are experiencing more losses than gains. According to CoinMarketCap data, the fear index is at 24, indicating extreme fear.

According to coinglass data, the total liquidation across the network in the past 24 hours amounted to $213 million, with long positions liquidated totaling $163 million. The largest liquidation occurred on Binance's ETH/USDT, valued at $13.3084 million.

Since reaching a peak last December, the market has declined for three consecutive months, with retail sentiment low. Will the market improve in the future?

Bitcoin Spot ETF Sees 10 Days of Net Inflows, but the Pace Slows

Recently, Bitcoin spot ETF data has performed quite well, with net inflows exceeding net outflows for 10 consecutive days since March 14, and net inflows exceeding $100 million on March 17, 18, and 20. However, starting from March 21, net inflows have not exceeded $100 million again. On March 28, the spot ETF saw a net outflow of $93 million, ending the streak of 10 consecutive net inflows.

In contrast, Ethereum's spot ETF appears very pessimistic compared to Bitcoin, with only two days of net inflows this month, while the rest have seen net outflows. Its price performance is also predictable. Ethereum's sluggish performance has significantly dragged down many altcoins, especially in sectors like L2 and re-staking.

Market Risk Aversion Ahead of April 2 U.S. Tariff Policy

On March 31, the Japanese stock market fell by 4%, and the South Korean stock index's decline expanded to 2.3%, with U.S. futures also showing a decline in early trading. As the U.S. tariff policy is set to be unveiled on April 2, market uncertainty will reach new heights. According to CCTV news on Saturday, it was reported that U.S. President Trump plans to announce new tariffs in the coming days, expressing a somewhat open attitude towards reaching tariff agreements with other countries, but he hinted that any agreements would be made after the tariffs take effect on April 2.

In its latest report, Citigroup summarized three main scenarios and their corresponding market impacts: first, only announcing reciprocal tariffs, which would have a limited market reaction; second, reciprocal tariffs plus value-added tax (VAT), which could cause the dollar index to rise immediately by 50-100 basis points, with global stock markets potentially declining; third, including industry-specific tariffs in addition to reciprocal tariffs and VAT, which could lead to a more severe market reaction.

After the S&P 500 faced its worst first quarter since 2020, analysts have warned that the potential for further declines outweighs the chances of an increase. Some analysts pointed out that future tariffs and retaliatory actions are key, and the market reaction on "April 2" will largely depend on the timing of the tariffs, especially industry tariffs and the speed of other countries' responses to reciprocal tariffs.

The cryptocurrency market, led by Bitcoin, is increasingly correlated with U.S. stock performance, and as a risk asset, it will face significant volatility around the policy announcement. Additionally, on the evening of April 4, the U.S. will release unemployment rates and non-farm payroll data, followed by Powell's keynote speech. With a flurry of data and policies approaching, some market investors are choosing to sit on the sidelines.

Future Market Trends

Bloomberg Intelligence commodity strategist Mike McGlone analyzed that the market should now focus on ETH price trends, as there is a clear correlation between ETH and other risk assets. If stocks in the S&P 500 continue to weaken, ETH may further decline. At the same time, McGlone believes that a return to the $2,000 level for ETH could signal direction for risk assets. However, if Bitcoin fails to stabilize its price growth, it may exacerbate losses for altcoins, especially leading altcoins, potentially causing ETH to fall back to the $1,000 price level later this year.

David Duong, head of strategy research at Coinbase, stated that the market reaction on April 2 will be relatively calm, but the warning here is that no one is prepared for this, mainly due to the many variables that need to be tracked and the numerous paths to consider. This presents some extreme possibilities, particularly regarding the performance of specific industries and their larger economic impact. However, as earnings season will soon become the next major focus, the market will not be ready to take significant positions before mid-April.

Paoul, founder of Real Vision, shared a chart of global liquidity M2 alongside Bitcoin price trends, stating that the market is in a bottom range.