Dogecoin (DOGE) and Ether (ETH) plunged $DOGE
9% over the past 24 hours, following Bitcoin’s (BTC) 4.5% decline below $80,000. The sharp downturn triggered a wave of liquidations totaling $700 million in long positions.
Traders betting on a crypto rally faced heavy losses, with BTC longs accounting for $420 million in liquidations, ETH longs for $150 million, and DOGE longs for $30 million. Solana (SOL) fell 8%, while XRP slipped 7%, dragging the broader CoinDesk 20 (CD20) index down more than 6.5%.
Open interest in BTC futures dropped 7% to $45 billion, signaling widespread forced liquidations as traders faced margin calls.
### Risk-Off Sentiment and Macroeconomic Pressure
Nick Ruck, director at LVRG Research, attributed the sell-off to a shift in investor sentiment. “The likelihood of a Federal Reserve rate cut has weakened following a stable jobs report, and traders are bracing for February’s CPI report to mirror January’s inflation figures,” Ruck told CoinDesk.
“With economic uncertainty, traders may move to the sidelines, waiting for clearer signals on monetary policy, which may not come until later this year,” he added.
Broader market jitters further weighed on crypto, with the S&P 500 down 2% and the Nasdaq losing 3%—marking the largest single-day drop in U.S. equities since September 2022. Concerns over upcoming U.S. trade tariffs and recession fears, fueled by a recent Donald Trump interview, added to the bearish outlook. The ‘Magnificent 7’ tech stocks alone saw $830 billion in market capitalization wiped out.
### Strengthening Dollar and Treasury Yields Add Pressure
Hawkish signals from the Federal Reserve in late February—suggesting fewer rate cuts in 2025—combined with a stronger U.S. dollar and capital flight into safe-haven assets like gold and the Japanese yen have further dampened hopes of a near-term recovery.
Despite the sell-off, some contrarian indicators suggest a potential short-term rebound. The Crypto Fear & Greed Index sits at 15, deep in “extreme fear” territory, a level historically associated with market capitulation and eventual relief rallies.
Singapore-based QCP Capital noted that watching Treasury yields and the dollar could offer insights into the market’s next move. “Despite current turmoil, not all signals are bearish,” QCP said in a Tuesday market update.
“A risk-off environment has driven 10-year Treasury yields down by around 60 basis points and weakened the U.S. dollar—historically positive signals for USD-denominated risk assets like equities and crypto,” the firm explained.
QCP added that lower yields could also ease U.S. borrowing costs, a key factor as Trump’s policy roadmap—potential tax cuts and a more expansionary fiscal approach—takes shape.
