The crypto market took a major hit on Friday, wiping out nearly all the gains from earlier this week.

Bitcoin, which was hovering close to $88,000, plunged to $83,800, marking a 3.8% decline in just 24 hours.

The crypto market took a major hit on Friday, wiping out nearly all the gains from earlier in the week. Bitcoin price dropped 3.8% in just 24 hours as major altcoins like Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) lost almost 10%.

Crypto Market Down $115 Billion in a Day As U.S. Stocks Take a Hit

Bitcoin price took a significant hit on Friday, erasing almost all the gains from the previous week. The crypto market cap also saw a substantial decline of $115 billion in 24 hours, according to the latest data.

Bitcoin price dropped 3.8% on Friday, trading at $83,800 at press time. The world’s largest cryptocurrency had briefly touched the $88,000 mark earlier this week.

Major altcoins also struggled, with AVAX, MATIC, NEAR, and UNI losing nearly 10% each. ETH price slipped over 6%, hitting its weakest price against BTC since May 2020.

Unlike Bitcoin ETFs, which saw over $1 billion in inflows over the last two weeks, ETH ETFs failed to attract new investments since early March. This lack of interest adds to concerns about ETH’s performance compared to BTC.

How Are U.S. Stocks and Economic Woes Impacting Crypto?

The downturn wasn’t just limited to digital assets. The broader U.S. stock market also saw a sharp decline following the release of weak economic data.

The S&P 500 fell 2%, while the Nasdaq dropped 2.8%. Crypto-related stocks suffered even more, with MicroStrategy (MSTR), the largest corporate holder of Bitcoin, losing 10% and Coinbase (COIN) falling 7.7%.

The February inflation report showed a 2.5% year-over-year rise in the price index, with core inflation at 2.8%, slightly above expectations. Consumer spending only grew by 0.4%, and adjusted figures indicate weak economic growth.

The Federal Reserve’s GDPNow model now predicts the U.S. economy could shrink by 2.8% in the Q1, raising fears of stagflation. Plus, new U.S. tariffs set to take effect on April 2 have added to investor concerns.

Was This Bitcoin Price Crash Expected?

Bitcoin’s drop to $84,000 was anticipated due to the CME futures gap from earlier this week. Historically, BTC tends to revisit these gaps and this pullback was likely.

However, with Bitcoin closely following the Nasdaq’s movements, a continued downturn in U.S. stocks could lead to further losses in crypto.

But Santiment notes that while global stock markets, including the S&P 500, faced sharp declines due to tariff and inflation concerns, Bitcoin managed a slight weekly gain, hovering around $84.3K.

A mild BTC rebound after the stock market’s close hints at crypto’s growing independence from equities, a contrast to its strong correlation during the 2022 bear market.

Despite the ongoing correction, some experts see long-term positives. Joel Kruger, a strategist at LMAX Group, pointed out that crypto adoption is growing, with major financial institutions expanding their involvement.

While more short-term dips could occur, Kruger expects strong support around the $70,000-$75,000 range, making a potential recovery later this year more likely.

On the Downside…

Crypto analyst Michaël van de Poppe warns that Bitcoin is losing momentum, with key liquidity levels below $84K at risk.

If BTC breaks this support, further declines could follow. Van de Poppe suggests another week of drops might be on the way before a potential rebound in Q2.Weak U.S. economic data and rising inflation sparked a selloff across both crypto and stock markets.