Tariffs, tumbles, and tokens: A tale of market woe
Markets recoiled on Trump’s tariff talk, and crypto’s resilience was short-lived
Only background/Shutterstock and Adobe modified by Blockworks
This is a segment from the 0xResearch newsletter. To read full editions, subscribe.
When Trump said “tariff” was the most beautiful word in the dictionary, he neglected to mention that beauty is subjective.
Since Trump’s “reciprocal” tariff announcements on April 2, the S&P 500 is down about 10.6%.
Even gold, typically considered to be uncorrelated with equities, took about a 6.4% dive on the tariff news.
Crypto markets held up over the weekend, much to everyone’s surprise.
Many theories were offered for explanation.
Some suggested crypto assets showed resistance on anticipated rate cuts and quantitative easing; some said the equities selloff on Friday was simply institutional outflows; and Galaxy’s Alex Thorn posited that BTC was simply “tariff-proof.”
Yet, after this brief flirtation with the idea that crypto assets would decouple from equity markets, it turned out to be pure hopium.
As the weekend drew to a close, bitcoin took a 6% nosedive on noon Sunday from $82.5k to its current trading levels of $77.2k. In the same time period, ETH took a harder tumble of 15.7%.
Down, but not a panic yet, according to CF Benchmarks’ head of product Thomas Erdösi. He notes that “CME basis remains firm above 6%, and the demand for downside protection, as seen in the 25-delta skew, underscores cautious sentiment without signaling panic.”
Total crypto market cap wiped thus far? About $0.23 trillion, or 8.6%.
At bitcoin’s current price of $77k, that is about a steep 27.2% drawdown from January’s all time-highs of $106k, but still a relatively light drawdown compared to past years. The pink part of the Glassnode chart demonstrates yesterday’s drawdown relative to the last cycle.
Based on CoinGlass data, total estimated liquidations of crypto assets in the last 24 hours equaled to about $1.42 billion. BTC saw about $479 million while ETH saw $418 million in liquidations.
On the April 6 and 7, Aave v3 on Ethereum saw a total $91.85 million in liquidations and accumulated zero bad debt, based on Blockanalitica data.
It wouldn’t be crypto if you weren’t looking for opportunities in a downturn.
Based on the four-hour chart of CoinGlass’ relative strength index (RSI) heatmap, notable tokens in the $400-$500 million market cap range showing relative strength include the AI memecoin FART (RSI: 51), the DePIN token GRASS (RSI: 54) and the DeFi token PENDLE (RSI: 47).
All three tokens are trading within the neutral RSI band, outperforming a broader market skewed toward oversold conditions. This may suggest bullish upward momentum as these tokens diverge from downside pressure everywhere else.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
