- Bitcoin crashed to $80,000, erasing $200 billion from the market, following Trump’s Executive Order.
- Ethereum dropped to a six-month low of $1,992, while volatility surged, prompting crypto traders to hedge.
- BTC whales accumulated 22,000 BTC despite the downturn, with potential support at $75,000, warns Arthur Hayes.
Bitcoin has plunged to $80,000, wiping out over $200 billion from the crypto market in one of the worst single-day crashes in a year. Ether also crashed, falling below $2,000 to $1,992, a six-month low. The sell-off followed Donald Trump’s Executive Order.
Trump signed the order on Thursday, launching the Strategic Bitcoin Reserve. Traders expected a bullish rally, but the market nosedived instead. Bitcoin initially dropped from $90,000 to $85,000 within minutes. The White House Crypto Summit, set for Friday, lost its impact after Trump’s surprise announcement, leading to a brutal market reaction.
Crypto Traders Hedge Amid Volatility Surge
Crypto traders scrambled to hedge against deeper losses, with volatility spiking and put contracts gaining demand, per Coinglass data. Trump’s participation in the summit was brief, offering no new policies. Instead, industry leaders praised his administration’s crypto progress, but the event failed to deliver substantial market confidence.
Economist Peter Schiff criticized the summit, calling it a disgrace and warning that the White House had been captured by crypto interest groups. Meanwhile, concerns over the U.S. economy persist. A $9.2 trillion debt refinancing crisis looms in 2025, putting immense pressure on interest rates and fiscal policy.
The 10-year Treasury yield has dropped by 60 basis points over two months, signaling recession fears. Elon Musk’s Department of Government Efficiency aims to cut $2 trillion in spending, but progress is slow. Trump has also pressured OPEC to lower oil prices to combat inflation, but recession risks continue to mount.
Bitcoin’s Outlook and Investor Sentiment
The Atlanta Fed slashed its Q1 2025 GDP estimate to -2.8%, raising concerns about economic stability, according to an analysis from The Kobeissi Letter. Traders anticipate Fed rate cuts, but inflation remains a roadblock. Inflation expectations surged to 6.0%, the highest since May 2023, casting doubts on imminent rate cuts that could support Bitcoin’s price recovery.
Bitcoin now hovers around $80,909, down over 6% in a day and 3.37% for the week. Trading volume plummeted 53%, yet BTC whales have accumulated 22,000 BTC in three days. Analysts are baffled by the decline, as the week was packed with bullish news, including the Strategic BTC Reserve announcement.
Macroeconomic factors, including new U.S. tariffs and a concerning non-farm payrolls report, have intensified selling pressure. Market watchers believe BTC could retest $78,000, with $75,000 as the next major support level. BitMEX co-founder Arthur Hayes warned of a violent move if BTC enters the $70K-$75K range, as per Arthur post on X.
CryptoQuant data indicates exchange reserves are depleting, suggesting a supply shock. However, panic selling overshadows fundamentals. Despite the downturn, El Salvador’s President Nayib Bukele continues buying the dip, adding five more BTC to the country’s holdings.
Read More: Bitcoin (BTC) Warning: Sharp Drop Looms as $78K Support Faces Critical Test
