Is the crypto market really turning bearish? What are the views of institutions and traders?
Author: ChandlerZ, Foresight News
On March 11, due to the rising risk of a US economic recession, the market was seriously concerned. At the close, the three major US stock indexes collectively plummeted. The Dow Jones Industrial Average fell 2.08%, closing down nearly 900 points; the Nasdaq index fell 4%, and the S&P 500 index fell 2.7%.
Large tech stocks plummeted, with Tesla plunging 15.43%, the biggest single-day drop in more than 4 years, with its market value evaporating $130 billion overnight, and the stock price "halving" from its historical high.
At the same time, Bitcoin continued to decline, officially breaking below $80,000. As of the time of writing, Bitcoin is reported at $79,090, with a low of $76,560, a daily drop of over 8%. In addition, Ethereum briefly fell below $1,800, with a low of around $1,760. Several Ethereum whales had their positions liquidated, and an address holding 1,500 weETH (total debt of about 227,000 DAI) in leveraged long positions was liquidated. After the ETH price fell below $1,800, its 643.78 weETH (worth about $1.23 million) was confiscated.
Another whale on Maker also faced liquidation, involving 60,810 ETH ($109 million). Due to the Ethereum oracle price on Maker not being updated, this whale ultimately reduced its position by 2,882 ETH to 5.21 million DAI before the 10 am Maker oracle price update, slightly lowering the liquidation price to $1,781. In addition, a wallet suspected to be from the Ethereum Foundation deposited 30,098 ETH ($56.08 million) into Maker 6 hours ago to lower the liquidation price. Currently, this wallet holds 100,394 ETH ($182 million) on Maker, with a liquidation price of $1,127.06.
According to Coinglass data, the total crypto market liquidation amount in the past 24 hours reached $937 million, of which $742 million were long positions and $194 million were short positions, with a total of 331,076 people being liquidated. The largest single liquidation occurred on the BTCUSD trading pair on the Bybit exchange, worth $5.26 million.
Since reaching a new all-time high on December 16, 2024, the crypto market has evaporated $1.3 trillion in market value, a 33% drop, equivalent to an average daily loss of $15.5 billion for 84 consecutive days. This marks the largest three-month market value correction in crypto history, with the total crypto value now at its lowest level since November 6, 2024.
Has the bull market really ended? How long will this downturn last? In a market where panic sentiment is spreading, are there still opportunities to buy the dips? How do institutions and traders view the future market?
Views of Institutions and Traders
Arthur Hayes: Don't rush to buy the dips, Bitcoin may bottom around $70,000
BitMEX co-founder Arthur Hayes wrote that his plan is: be patient, don't rush. Bitcoin may bottom around $70,000, a 36% correction from the historical high of $110,000, which is very normal in a bull market. Then we need to see a free-fall crash in the US stock market, followed by the bankruptcy of big players in traditional finance. After that, when the Fed and central banks start flooding the market with liquidity, that's when it's time to go All in. Traders will try to buy the dips, and if you are risk-averse, you can wait until the major central banks start flooding the market before increasing your positions. You may not precisely time the bottom, but you won't have to suffer through the prolonged consolidation and potential drawdowns.
He also pointed out that BTC trading is 24x7 globally, and anyone with internet access can trade it, it cannot be infinitely printed, and the consequence of failure is bankruptcy or liquidation. No country's fiscal policy is directly tied to BTC price appreciation. Stock trading is 8x5, only accessible to certain people, and they cannot be infinitely printed, but if you have political connections, you may get bailed out after failure. US marginal tax revenue is directly linked to the stock market. Therefore, the stock market will ultimately be bailed out, it's just a matter of whether your portfolio can survive until the bailout happens. BTC is a true free market, while the stock market is not. Therefore, in a fiat liquidity crisis, BTC will lead stocks in both the decline and the rebound.
Cathie Wood: The market is currently digesting the final stage of a rolling recession
ARK Invest founder Cathie Wood said the market is currently digesting the final stage of a rolling recession, which will give the Trump administration and the Fed more policy adjustment room than investors expect, potentially leading the US economy into a "deflationary boom" in the second half of this year. Cathie Wood believes the Fed's monetary policy will be more flexible, and the market may have underestimated this potential economic rebound momentum.
A rolling recession refers to an economic phenomenon where different industries and sectors experience recessions in turn, while the overall economy and job market remain relatively stable.
YouHodler: Bitcoin's current consolidation period may evolve into a medium-term bear market
YouHodler's market manager Ruslan Lienkha pointed out that Bitcoin's consolidation phase last year lasted for months (even up to half a year) before the next upswing. However, he believes the current market environment is more complex. Pessimism in the US stock market is dominant, and concerns about a potential US recession are also intensifying. Given these factors, the current consolidation period may evolve into a medium-term bear market.
But Lienkha noted that although Bitcoin may potentially become a safe-haven asset in the future, investors currently still view it as a high-risk asset, often reacting more violently to changes in market sentiment than traditional financial markets.
Yuga VP: If this is the start of a bear market, ETH could drop to $200-400
Yuga Labs' blockchain business VP 0xQuit said he has seen predictions of ETH's bottom being around $1,500, and given the current market conditions, this seems reasonable, but you need to ask yourself an important question - are we at the beginning or the end of a bear market?
If this is the end of the bear market, that's great. BTC has not suffered too much price impact, and its price is still stable at levels that were record highs just a few months ago, which is very bullish for BTC.
However, if this is the start of a bear market, then be prepared to see ETH's price much lower than $1,500. Thinking that an asset that has dropped 30% this week and over 50% in the past 3 months will only have another 20% to go to its long-term bottom is quite absurd. If the bear market is just beginning, the target price for ETH could be $200-400, meaning another 80% drop, a total of 90% decline, consistent with past bear markets.
0xQuit finally said: "Personally, I'm leaning bullish at this level, but my portfolio positioning can also accept the market continuing to decline. If you can't accept the worst-case scenario, consider selling some."
Bravos Research: The crypto market is experiencing the largest Altcoin liquidation since the LUNA collapse
According to Bravos Research analysis, the current crypto market is experiencing the largest Altcoin liquidation since the LUNA collapse in May 2022. The market has seen about $1 billion in liquidations, far exceeding the situation after the FTX collapse. Data shows Bitcoin's dominance is continuing to rise, indicating no obvious Altcoin season signal in the short term.
Anthony Pompliano (Pomp): Trump is deliberately crashing the market to force the Fed to cut rates
Crypto analyst Anthony Pompliano (Pomp) has put forward a bold theory: the Trump administration may be deliberately creating chaos in the stock market, with the aim of forcing the Federal Reserve to cut interest rates to avoid the US having to refinance about $7 trillion in debt. Pomp pointed out that the yield on the 10-year US Treasury bond has fallen from 4.8% in January to the current 4.21%, indicating that the strategy is moving in the right direction.
Trump has previously stated on Fox News that no one can get rich when interest rates are high, as people cannot borrow money. The market expects the Federal Reserve's March meeting to maintain the current interest rate, but the possibility of a rate cut in May is now close to 50%.
Eugene: A small limit order to long SOL at $113 has been triggered
Eugene Ng Ah Sio posted on his personal channel that a small limit order to long SOL at $113 has been triggered - let's see if this signals some form of short-term bottom.
