Crypto, Bitcoin and Stock Market Crash: Here Are 3 Reasons (And What It Means for Traders)

Crypto market is going through one of the worst periods in history. We haven't seen this kind of bloodbath since the Covid 2020 crashes

The crypto market is currently going through one of the worst periods in history. We haven’t seen this kind of bloodbath since the Covid 2020 crashes which means even the bear market from 2022 and partially 2023 was not like this.

Bitcoin price is well-below $80k now, while Ethereum is trading at almost 2-year lows, below $1,500.

Here are 3 reasons why this is happening.

1. Trade Wars Hit Markets Hard

President Trump just put big tariffs on goods from China, India, and Europe. These tariffs are between 20% and 34%. This has many people worried about a global trade war. When this happens, stocks and crypto both drop.

The tariffs mess up how companies get their supplies. This makes everyone unsure about the economy. Trillions of dollars disappeared from U.S. stocks. People also sold their crypto fast. When regular markets get shaky, crypto often falls even harder.

2. Crypto Sell-offs and Liquidations

In just one day, over $1.3 billion in crypto trades got liquidated. This means many traders who borrowed money to buy crypto had to sell when prices dropped.

12% in one day for ETH. It’s trading below $1,500 again, reaching levels last seen in late 2023. Bitcoin price dropped below the $77,000 mark.

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The cryptocurrency market is going through a rough patch, with major sell-offs and liquidations hitting the headlines. In the past 24 hours alone, over $1.3 billion in crypto trades were liquidated.

This occurs when traders who borrowed money to buy crypto at higher prices are forced to sell at lower prices to avoid further losses, especially when the margin trades get liquidated.

As a result of the liquidations, prices fell even further, creating a vicious cycle of selling pressure.

Moreover, with the US economy slowing down and the threat of a recession looming, investors are pulling back from riskier assets such as crypto.

This is evident in the recent triple-digit drops in the Japanese and South Korean stock markets, indicating a broader market selloff across different asset classes.

As fear grips the market, almost all major cryptocurrencies saw significant declines. Bitcoin dropped below $77,000, while Ethereum fell below the $1,500 mark.

Additionally, XRP fell below $0.40, Solana dropped below $28, and Dogecoin slid below the $0.04 level.

What Can Traders Do in These Situations?

During times like these, it’s best for traders to sit back and observe the market trends. Trying to make trades when everyone is in a panicking mood can lead to hasty decisions and mistakes.

It’s also crucial not to make choices based on fear. Keep some money in stable assets and some in the altcoins that you truly believe in for the long term.

It’s probably not a good time to put in more money until things calm down. However, if Ethereum drops to the $1,200-$1,300 zone, it might be a good time to start buying for the long term.

History shows us something interesting about what’s happening now. A 10% dip in two consecutive days has only happened for the fourth time in history.

October 1987.

October 2008.

March 2020.

April 2025.

In 1987 & 2020, it marked the bottom.

In 2008, it took one more month to mark the bottom.

If Ethereum drops to between $1,200 and $1,300, it might be a good time to buy for the long term. History shows us something interesting about what’s happening now. A 10% drop two days in a row has only happened four times: October 1987, October 2008, March 2020, and now April 2025.

In 1987 and 2020, this marked the bottom. In 2008, prices fell for one more month before hitting bottom. We might be near the end of this crash, but no one can say exactly when it will end.

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