The crypto market began the week strongly, with Bitcoin surpassing $102,000 during Asian trading hours after news of a 90-day tariff pause between the U.S. and China fueled optimism. However, the bullish trend reversed abruptly as the New York session opened. Bitcoin plummeted to an intraday low of $100,700, erasing most of its earlier gains. Traders grew cautious ahead of critical macroeconomic events, particularly the upcoming U.S. Consumer Price Index (CPI) release.
"Macro concerns are driving the market now, and all eyes are on the June Fed meeting," noted Jeff Mei, COO at BTSE, referencing Monday’s $500M crypto liquidation.
A temporary U.S.-China tariff truce may have eased equities—but it’s cooled crypto’s risk-on momentum.
Crypto Liquidations Trigger Market Volatility
The sudden price drop led to over $500 million** in long liquidations across the crypto market. Bitcoin futures alone accounted for nearly **$200 million in wiped-out positions, while Ether faced $170 million in liquidations (per Coinglass data).
Analyst Ali Martinez flagged a high-risk liquidation zone, suggesting that a Bitcoin drop to $102,700** could trigger **$1.45 billion in forced liquidations. He also cautioned that Bitcoin’s current chart pattern mirrors its 2021-22 cycle—a breakout followed by a steep decline—raising fears of a repeat crash.
Altcoins Follow Bitcoin’s Downturn
The sell-off extended beyond Bitcoin:
- Dogecoin (DOGE) and Cardano (ADA) fell ~7%.
- Solana (SOL), XRP, and BNB lost 5%–6%.
This reversal occurred just days after Ethereum surged 40% and Bitcoin briefly breached $104,000, fueled by massive short liquidations.
U.S.-China Tariff Impact on Crypto
The tariff rollback between the U.S. and China stabilized stock markets but dampened speculative crypto trading. Futures open interest dropped by $1.2 billion as traders exited leveraged positions, reflecting reduced risk appetite.
Federal Reserve Meeting: The Next Catalyst
Market attention now shifts to June’s Federal Reserve meeting. A dovish stance could reignite economic activity and boost crypto markets. Until then, investors remain wary of further volatility.
In summary, early-week optimism has given way to caution, underscoring the fragility of crypto rallies in a macro-driven landscape.
FAQs
Why did crypto markets drop today?
A sharp reversal led to $500M in liquidations as traders reacted to macro uncertainties, including upcoming CPI data and Fed policy signals.
Will the crypto market recover?
Recovery hinges on macroeconomic developments—particularly CPI results and the Fed’s June tone—alongside renewed investor confidence.
When is the CPI data released?
The U.S. April 2025 CPI report will be published at 8:30 AM ET on Tuesday, May 13, 2025, by the Bureau of Labor Statistics.
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