The cryptocurrency market, which started the week on a promising note, faced sharp declines on Friday due to sudden selling pressures. The rising expectations at the beginning of the week were quickly replaced by uncertainty as rapid declines affected the overall market. Many cryptocurrencies experienced double-digit losses, prompting traders to adopt a more cautious stance. Significant declines were observed in prominent cryptocurrencies including Bitcoin 
$111,391 and Ethereum 
$2,678.
Bitcoin and Altcoins Experience Sharp Retracements
Bitcoin surged to approximately $88,000 on Thursday but fell to $83,800 by Friday. The CoinDesk 20 Index recorded a decline of 5.7%, with losses in altcoins such as Avalanche, Polygon, Near, and Uniswap nearing 10%. Ethereum also lost value against both the dollar and Bitcoin, hitting its lowest point relative to BTC since May 2020.
This sudden market downturn is considered a reflection of the technical analysis concept of “filling price gaps.” Experts suggest that Bitcoin’s pullback to the $84,000-$85,000 range is not surprising. Joel Kruger from LMAX Group noted that predicting whether the bottom has been formed by 2025 remains uncertain, but the $70,000-$75,000 range is highlighted as a strong support zone.
Economic Data Undermines Market Confidence
Recent economic data from the U.S. has impacted both traditional and cryptocurrency markets directly. The S&P 500 and Nasdaq indices fell by 2% and 2.8%, respectively. Companies focusing on cryptocurrency, such as MicroStrategy and Coinbase, also faced significant losses in their stock prices.
February’s Personal Consumption Expenditures (PCE) inflation data came in above market expectations. The annual increase of 2.5% and a 2.8% rise in core inflation heightened uncertainties regarding the Fed’s monetary policy. Simultaneously, a 0.4% rise in consumer spending raised questions about growth prospects. This complex situation has directly influenced investor risk appetite.
Experts Advise Caution Amid Ongoing Volatility
The high correlation between Bitcoin and tech stocks has paved the way for the cryptocurrency market to be influenced by fluctuations in traditional markets. The decline in Bitcoin following the drop in Nasdaq has once again highlighted this relationship. CoinDesk analysts, including James Van Straten, stated that Bitcoin has historically filled similar price gaps, making the current retracement unsurprising.
Investors are becoming increasingly cautious due to the comprehensive tariffs planned by the U.S. for the coming week. Global growth concerns have created an uncertain atmosphere in both traditional and crypto markets. In light of these developments, the likelihood of a near-term recovery remains uncertain.
