This week, both crypto and traditional markets have taken a hit, with several key indicators pointing to increased volatility and cautious investor sentiment. Here's a quick rundown of what's happening and what could be coming next.
Crypto in the Red
The crypto market has been on a downward trend since mid-March, flirting with some of the lowest levels seen in Q1.
Bitcoin (BTC) is down nearly 4%, hovering around $84,115, after rebounding slightly from this week’s low near $81,300.
Ethereum (ETH) had a tougher week, dropping almost 10% and dipping below $1,800—the second time this year.
XRP (Ripple) took the biggest hit, tumbling 15% and losing much of the momentum gained after the SEC case resolution. It's struggling to stay above the $2 mark.
Other altcoins like Solana, Dogecoin, and Cardano also recorded double-digit losses.
NFTs Are Struggling Too
The NFT market isn't faring much better. Apart from a few outliers, trading volumes are down significantly:
Bybit has officially shut down its NFT marketplace, citing a 70% drop in volume over the past year.
Data from Token Terminal shows NFT trading activity has returned to levels not seen since summer 2024. March was particularly brutal.
Macro Headwinds: Recession Fears and Tariffs
Looking beyond crypto, global markets are navigating a minefield of uncertainty:
The risk of a U.S. recession is looming as Q1 earnings season begins.
Former President Donald Trump announced new tariffs, with a 25% tax on car imports becoming effective this week. More tariffs—potentially up to 20% across the board—could be on the way, signaling a broader push against globalization.
The EU is preparing retaliatory measures, further complicating global trade dynamics.
S&P 500 Slips, But Investors Are Still Active
The S&P 500 dropped below 5,500, marking its worst Q1 since 2022.
Despite the drop, investors are not backing out entirely. According to Reuters, $22 billion flowed into equity funds from March 25–28—the highest inflow since November. This surge came after Trump delayed some of the harsher car import tariffs.
Bitcoin Dominance Rises Again
Bitcoin dominance is now above 62.5%, indicating that altcoins are underperforming relative to BTC.
Institutional interest appears to be propping up Bitcoin, while altcoins face lower liquidity and higher speculation risks.
US Bitcoin ETF inflows were modest—just $190 million last week. In comparison, Ethereum ETFs saw very little action.
Is Liquidity the Silver Lining?
Some analysts remain optimistic, pointing to M2 money supply—a broad measure of liquidity including cash and money market accounts—as a potential leading indicator for crypto performance.
Historical data shows that the M2 surge during COVID closely mirrored Bitcoin’s explosive rally.
The latest M2 data from February shows an acceleration, suggesting more liquidity could be entering the system.
But more liquidity isn’t all good news. It may fuel inflation, complicating the outlook for interest rate cuts that investors are still hoping for. Too much liquidity could send prices soaring across markets—causing more instability than relief.
Final Thoughts
Markets are tense right now, and both crypto and traditional investors are navigating uncertainty from every angle—macro policy shifts, geopolitical tensions, and shaky fundamentals.
Will liquidity inject new life into crypto? Or will recession fears keep markets under pressure? For now, all eyes are on upcoming earnings reports, interest rate decisions, and tariff developments.
Stay tuned and stay sharp.
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