The crypto and stock markets took a brutal hit today, March 4, 2025, leaving investors scrambling for answers. Bitcoin (BTC) plunged below $85,000, Ethereum (ETH) dropped over 10%, and altcoins like Solana (SOL) and XRP saw double-digit losses. Meanwhile, the S&P 500 fell sharply by 2.5%, and tech giants like NVIDIA and Tesla shed billions in market cap. So, what sparked this bloodbath? Let’s break it down.
1. Trump’s Tariff Wars Escalate Risk-Off Sentiment
Today marked the official rollout of U.S. President Donald Trump’s new tariffs on imports from China, Mexico, and Canada—announced earlier this year as part of his economic agenda. The move sent shockwaves through global markets, with fears of inflation and trade disruptions driving investors away from risky assets. Crypto, often correlated with high-growth stocks, wasn’t spared. The U.S. dollar strengthened as a safe haven, putting additional pressure on BTC and altcoins.
2. Massive Liquidations Amplify the Drop
The crypto market saw over $980 million in liquidations in the past 24 hours, according to CoinGlass data. Long positions bore the brunt, with $832 million wiped out as traders betting on a continued bull run were caught off guard. Bitcoin’s drop below the $90,000 support level triggered a cascade of stop-loss orders, while Ethereum’s fall below $3,200 fueled panic selling. On Binance alone, a single liquidation event saw a trader lose $25 million, highlighting the scale of the chaos.
3. Stock Market Spillover: Tech Takes a Hit
The stock market didn’t fare much better. Rising U.S. bond yields—spurred by expectations of tighter Federal Reserve policy—hammered tech stocks, a key driver of both equity and crypto sentiment. NVIDIA dropped 5%, erasing over $150 billion in value, while Tesla slid 3%. The Nasdaq 100 fell 1.8%, reflecting a broader “risk-off” mood. Crypto’s growing ties to traditional markets meant it couldn’t escape the fallout.
4. Bitcoin Network Slowdown Raises Eyebrows
Adding fuel to the fire, Bitcoin’s network activity hit a concerning low. CryptoQuant data shows the mempool—where transactions wait to be confirmed—nearly empty, with fees dropping to 1 sat/vB, the lowest since March 2024. This signals waning demand for block space, a red flag for some investors already jittery about BTC’s post-$100,000 momentum. While not a direct cause, it deepened the bearish narrative.
5. Global Uncertainty: The Perfect Storm
Beyond tariffs and liquidations, broader factors piled on. Escalating geopolitical tensions, mixed signals from the Fed on rate cuts, and a volatile Chinese stock market (down 3% today) created a perfect storm. The Crypto Fear & Greed Index plummeted to 35, shifting from “Neutral” to “Fear,” as confidence evaporated.
What’s Next?
Despite the carnage, some analysts see a silver lining. Historically, crypto markets recover after sharp corrections, especially if macroeconomic fears ease. Bitcoin’s next support sits at $80,000—holding this could spark a rebound toward $90,000. For stocks, all eyes are on tomorrow’s Federal Reserve minutes release, which could clarify rate cut odds.
For now, caution reigns. Binance CEO Changpeng Zhao tweeted earlier today: “Dips are part of free markets—stay calm, assess your risk.” Wise words as we navigate this turbulence.
Disclaimer: This post includes third-party opinions and is not financial advice. Markets are volatile—do your own research.