Why Is the Crypto Market Experiencing a Downturn Today?

The total market capitalization of cryptocurrencies, along with Bitcoin (BTC), experienced sharp declines over the past 24 hours, wiping out gains made over the weekend. Investor sentiment has soured, largely due to fears of an impending recession exacerbated by Trump's tariff policies. Among the altcoins, Cardano (ADA) has been hit hardest, suffering a dramatic 30% drop today.

In today’s news:

• The SEC has dropped its lawsuit against Kraken, marking a shift in its strategy toward crypto enforcement. This decision follows the agency's recent retreat from several legal actions against prominent crypto firms like Coinbase and MetaMask.
• Binance has announced that it will delist USDT for users in the EU by March 31 to comply with the MiCA regulations, although users will still be able to withdraw funds until that date. With many exchanges already moving away from USDT, Circle might gain a stronger foothold in the European market.

The Crypto Market Loses Significant Ground

The overall crypto market cap decreased by $381 billion in just 24 hours, now standing at approximately $2.71 trillion. This downturn follows widespread market volatility, undid all weekend gains, and leaves investors feeling cautious amidst prevailing macroeconomic uncertainties.

If the total market cap continues to drop, it may approach the support level of $2.63 trillion. A bounce back from this point could indicate renewed buying interest at lower prices which may stabilize the market. On the flip side, a dip towards $2.58 trillion could happen if investor confidence wanes further, extending the ongoing correction.

Bitcoin's Price Drops Below $85,000

Bitcoin has fallen by 10.6% in the last 24 hours, reflecting a bearish trend across the market, now trading below the crucial support level of $85,000. Increasing selling pressure underscores the need for investors to observe potential stabilization signs.

Currently priced at $84,221, Bitcoin returns to levels reminiscent of February's 14% drop. The next key support lies at $82,761, which could temporarily halt further declines. However, failure to maintain this level might result in Bitcoin slipping below $80,000, signaling a more profound corrective phase.

Cardano Takes a Major Hit

Cardano's price has dropped 30%, positioning it as the worst-performing asset of the day. This steep decline has erased more than half of Sunday’s 71% rally that had briefly lifted ADA above $1.00, shaking investor confidence and increasing volatility in the altcoin arena.

Now trading at $0.80, ADA faces further risk of losses. If the selling pressure persists, it may test the support level at $0.77. A break below could see prices drop towards $0.70, reinforcing the bearish outlook.

However, reclaiming $0.85 as a support level may change the momentum. Should investors start buying at these lower price points, ADA could rise back towards $0.99, a critical resistance level. Surpassing this barrier would counteract the bearish view and restore bullish sentiment, potentially leading to a stronger rebound.