Crypto Market Tumbles as Bitcoin Drops to $83.8K Amid Broader Sell-Off

Hopes for a continued crypto rebound were dashed Friday as a sharp market sell-off erased nearly all gains from earlier in the week. Bitcoin (BTC), which hovered near $88,000 just a day ago, plunged to $83,800, marking a 3.8% drop in 24 hours. The CoinDesk 20 Index fell 5.7%, with altcoins like Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) all losing around 10%.

The total crypto market shed $115 billion, according to TradingView, with every asset in the CoinDesk 20 Index posting losses. Ethereum (ETH) dropped over 6%, hitting its lowest BTC-relative value since May 2020. Spot ETH ETFs have struggled to gain traction, recording no net inflows since early March, in contrast to BTC ETFs, which saw over $1 billion in inflows over the past two weeks, per Farside Investors.

This downturn mirrored U.S. equity markets, with the S&P 500 and Nasdaq falling 2% and 2.8%, respectively, on the back of weak economic data. Crypto-linked stocks also suffered: MicroStrategy (MSTR) plunged 10%, and Coinbase (COIN) dropped 7.7%.

The February PCE inflation report showed a 2.5% annual rise, with core inflation at 2.8%, slightly above expectations. Modest consumer spending and a bleak GDP forecast from the Atlanta Fed, projecting a 2.8% contraction, raised concerns about stagflation. Meanwhile, upcoming broad U.S. tariffs on April 2 further unsettled markets.

Some analysts view Bitcoin’s decline as a CME futures gap-fill between $84K-$85K, suggesting the move was anticipated. Despite uncertainty, analysts like Joel Kruger of LMAX Group see strong support near $70K-$75K and note increasing institutional interest and supportive U.S. policies as longer-term positives for the crypto market.