The cryptocurrency market faced significant turbulence on April 7, 2025, as escalating global trade war concerns triggered a sharp sell-off. Bitcoin, the largest digital asset by market capitalization, briefly slipped below the critical $75,000 support level before recovering slightly to trade around $77,000.
At one point during the day, Bitcoin plunged to a low of $74,425—marking a 10% drop from its price the previous evening. This sudden decline reflected heightened market volatility and investor anxiety. Ethereum, the second-largest cryptocurrency, also suffered heavy losses, falling from $1,800 to $1,411, its lowest intraday level since March 2023. However, both assets showed signs of recovery later in the session, regaining some lost ground.
Market Reaction to Global Trade Tensions
The selloff was largely driven by U.S. President Trump’s announcement of reciprocal tariffs on global trading partners, sparking fears of an escalating trade war. The move has already wiped out over $5 trillion in U.S. stock market value and spilled over into digital assets.
According to data from Coinglass, approximately $758 million worth of long positions across the crypto market were liquidated within 24 hours—the highest level in nearly six weeks. This wave of forced selling underscores the fragility of investor sentiment amid macroeconomic uncertainty.
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Options Market Signals Further Downside Risk
FalconX’s Asia-Pacific derivatives head, McNally, noted growing bearish pressure in the options market. “There’s been a clear rise in demand for put options,” he said, indicating that traders are increasingly hedging against further declines.
McNally identified key support levels for both major cryptocurrencies: $75,000 for Bitcoin and $1,500 for Ethereum. A sustained break below these levels could trigger additional selling momentum and deeper corrections.
Historically, during periods of financial stress—such as the early days of the pandemic—Bitcoin and Ethereum have shown strong correlation with tech-heavy indices like the Nasdaq 100. Despite earlier hopes that cryptocurrencies might decouple from traditional markets, recent price action suggests they remain vulnerable to broader financial turmoil.
Can Crypto Decouple from Traditional Markets?
Earlier in the week, when initial tariff fears emerged, crypto assets displayed relative resilience compared to tech stocks. Some analysts speculated this signaled a potential shift—perhaps digital assets were evolving into safe-haven or uncorrelated assets.
However, the April 7 selloff challenges that narrative. With Bitcoin down nearly 18% year-to-date despite pro-crypto regulatory signals from the Trump administration, it's clear that macroeconomic factors continue to dominate investor behavior.
Why This Matters for Investors
While favorable regulations could benefit the crypto industry long-term, short-term price movements are still heavily influenced by global economic sentiment. Trade wars, inflation concerns, and equity market swings all contribute to volatility in digital asset markets.
Investors should remain cautious and consider risk management strategies such as position sizing, stop-loss orders, and portfolio diversification—especially during times of heightened geopolitical tension.
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Key Takeaways and Outlook
- Bitcoin briefly fell below $75,000, testing a major psychological and technical support level.
- Ethereum dropped to $1,411, its weakest level since early 2023.
- Over $750 million in long positions were liquidated in 24 hours.
- Trade war fears and equity market declines are driving crypto volatility.
- Despite regulatory optimism, macro trends dominate short-term price action.
FAQ: Frequently Asked Questions
Q: Why did Bitcoin fall below $75,000?
A: The drop was triggered by global trade war fears following U.S. tariff announcements, which led to broad financial market sell-offs and increased risk aversion among investors.
Q: Is Bitcoin becoming more correlated with stock markets?
A: Yes. Data shows that during periods of high volatility—like the pandemic or recent trade tensions—Bitcoin often moves in tandem with tech stocks and indices like the Nasdaq 100.
Q: What happens if Bitcoin breaks below $75,000?
A: A sustained breakdown could lead to further downside, potentially targeting the next support zone near $70,000, depending on overall market sentiment and macro developments.
Q: How can I protect my crypto portfolio during downturns?
A: Consider using hedging tools like options, maintaining a diversified portfolio, setting stop-losses, and avoiding over-leveraged positions during uncertain times.
Q: Are crypto markets more stable now than in previous years?
A: While infrastructure and adoption have improved, crypto remains highly sensitive to macroeconomic news and investor sentiment—making it inherently volatile.
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Final Thoughts
While regulatory progress may lay the foundation for long-term growth in the digital asset space, short-term price action remains tethered to global economic forces. The April 7 selloff serves as a reminder that even mature cryptocurrencies like Bitcoin and Ethereum are not immune to systemic financial risks.
For investors, staying informed and agile is crucial. Monitoring macro indicators, understanding technical levels, and using risk mitigation strategies can help navigate turbulent markets with greater confidence.
Core Keywords: Bitcoin, Ethereum, cryptocurrency market, trade war fears, $75,000 support, market volatility, long liquidations, macroeconomic impact