Crypto Market Plummets Ahead of U.S. Open

Crypto-related equities are trading down heavily in pre-market trading ahead of the U.S. open. This follows a broader price plunge that began over the weekend and continued into Monday morning, driven by fears of a U.S. recession and heightened geopolitical tensions.

Weekend Price Declines

The crypto market experienced significant declines last week, which worsened over the weekend. Bitcoin dipped below $50,000, and ether fell beneath $2,200, erasing all its year-to-date gains.

Coinbase and MicroStrategy Stock Performance

Coinbase shares are trading at $167, down 18.5% from Friday’s close, potentially erasing its year-to-date gains. Meanwhile, MicroStrategy’s stock has declined by 26.3% in pre-market trading, despite the company announcing increased bitcoin holdings of 226,500 BTC last week.

Crypto trading app Robinhood halted 24-hour trading due to volatility and is down 15.3%. Jack Dorsey’s Block is down 10%, and major U.S. public bitcoin miner stocks also face losses:
– Marathon Digital (MARA): -19.1%
– CleanSpark: -24.9%
– Riot Platforms: -16.7%

ETFs and Traditional Stocks Affected

Spot Bitcoin and Ethereum ETFs are similarly affected, with BlackRock’s IBIT down 19.6% and ETHA down 25.8% in pre-market trading. The recent trading of these ETFs reflects the overall market downturn — ether has stayed below $3,000 since U.S. spot Ethereum ETFs launched.

In the traditional market, major stocks are also declining, with Apple down 9%, Microsoft down 5.9%, and Nvidia down 13.5% amid new AI chip delay reports.

Market Reactions

Analysts attribute the market’s decline to a combination of heightened geopolitical tensions and recession fears, stemming from last week’s poor U.S. employment report. Gracy Chen, CEO of Bitget, noted the emotional impact of large institutional movements, alongside macroeconomic pressures.

“There’s been a surge in the panic index, indicating market stress,” Chen stated.

The sell-off appears largely macro-driven, with Bitfinex analysts predicting short-term support around $48,900. The drop was triggered by various factors, including the Bank of Japan’s carry trade crisis and rising unemployment.

Despite the downturn, Binance CEO Richard Teng downplayed fears of a long-term negative trend, suggesting potential Fed rate cuts could stabilize the market.

As of now, Bitcoin trades at $50,189, down 17.5% in the past 24 hours and 25% in the last week. Ether is at $2,236, down 23.3% in the last 24 hours and 32% over the past week. The GMCI 30, a selection of top cryptocurrencies, has dropped 20.4% to 93.78, marking its largest daily drop since 2022.