The cryptocurrency market witnessed a sharp sell-off on April 7, with XRP, Solana (SOL), and Dogecoin (DOGE) among the hardest-hit assets. The downturn was triggered by mounting macroeconomic concerns and trade-related instability, pushing total liquidations across the market to nearly $1 billion.
According to market analysts, the downturn began during European trading hours, when Bitcoin fell below $75,000, setting off a chain reaction across the altcoin sector. The CoinDesk 20 index, which tracks major cryptocurrencies, dropped by 12%, highlighting widespread investor unease.
Altcoins See Double-Digit Losses
XRP and SOL led the declines, each losing more than 20% in just 24 hours. XRP fell below its critical 200-day moving average to trade at $1.70, while Solana slipped beneath the $100 threshold, marking a 64% decline from its all-time high. Dogecoin also dropped 20%, falling to around $0.13.
The wave of liquidations intensified as leveraged positions were wiped out, compounding the price drop and adding to investor caution.
Global Trade Tensions Fuel Market Stress
The crypto correction coincided with a spike in geopolitical tension. Former U.S. President Donald Trump announced new tariffs on Canadian and Mexican imports, along with a doubling of duties on Chinese goods to 20%. These moves raised fears of a broader trade war and potential retaliation from global partners.
China is reportedly exploring economic stimulus measures to offset the impact of the tariffs, although investor confidence remains shaky. The potential for trade disruptions has pushed investors toward safe-haven assets like gold and the Japanese yen, reducing risk appetite for volatile crypto holdings.
Analysts Expect Continued Volatility
Commenting on the market correction, analysts noted that crypto often leads traditional markets during weekends, suggesting that early-week volatility could signal a broader downturn. According to Jeff Mei, Chief Operating Officer at BTSE, unless key economies act swiftly to de-escalate trade tensions, continued downward pressure is likely.
Additional commentary from SignalPlus executive Augustine Fan suggests that the market is entering a full-fledged bear phase, warning that any short-term rallies could be fleeting. He noted that while Bitcoin might eventually benefit as a long-term hedge, near-term downside remains a strong possibility.
The latest crypto crash underscores the digital asset market’s growing correlation with macroeconomic factors and global policy decisions. As investors await further clarity on trade relations and monetary policy, volatility is expected to persist. Traders are advised to remain cautious, particularly when leveraging positions, given the elevated risk environment.
