What to know:
- Crypto's weak start of the week had BTC dropping below $80,000 and Ethereum's ETH briefly sliding below $2,000. Solana's SOL, Cardano's ADA, Aptos' APT, Avalanche's AVAX and NEAR fell 7%-10% over the past 24 hours.
- The downturn in crypto markets coincided with a sharp decline in U.S. equity indices, with crypto equities such as Strategy (MSTR) and Coinbase (COIN) tanking 10%.
- The crypto market is currently lacking near-term positive catalysts and is being impacted by macroeconomic headwinds of a potential tariff war and a slowing economy.
Cryptocurrencies extended a sell-off on Monday as risk assets including equities tanked during the early U.S. hours.
Following a bounce to around $84,000 earlier in the day, perhaps buoyed by Strategy's $21 billion fundraising plan, bitcoin (BTC) slid below $80,000, down 3.8% over 24 hours. The Ethereum blockchain's ether (ETH) briefly slipped below $2,000, to trade near its weakest price since November 2023, down around 4%.
The broad-market CoinDesk 20 Index fell 5%, with Solana's SOL, Cardano's ADA and Aptos' APT, Avalanche's AVAX and NEAR losing between 7% and 10%.
The ugly action in crypto markets came as the already-battered U.S. equity indexes opened the week sharply lower, weighing on sentiment. The Nasdaq tumbled over 3% in the early hours of the session, while the S&P 500 declined 2%.
Crypto equities also felt the heat. Strategy (MSTR), the largest corporate BTC holder, and crypto exchange Coinbase (COIN) lost more than 10%.
With the digital asset summit at the White House and President Donald Trump's Bitcoin reserve executive order already behind us, crypto markets have run out of near-term positive catalysts and are increasingly weighed down by concerns about a tariff war and a slowing economy.
The economy is in a "transition" phase, Trump said in an interview with Fox News on Sunday, refusing to rule out a recession this year.
"Until crypto finds a new narrative, we're likely to see an increased correlation between BTC and equities in the near term," hedge fund QCP said in a Telegram broadcast. "Both risk assets are currently trading near their recent lows, and with tariff risks still looming, volatility could pick up heading into key U.S. macro data releases."