As March 21 came and went, the entire cryptocurrency market was largely shaken by the recent collapse. Traders were quick to take profits after Bitcoin retraced from the $87,000 area. The overall capitalization of the market dipped 2.5%, falling to just under $2.75 trillion. The outcome of the Digital Asset Summit in New York City yielded disappointing results. This merger deal, against a backdrop of increased economic malaise, underscores the fragility of U.S. equities.

Market Analysis and Technical Indicators

A continuation bear flag pattern had formed. This comes on the heels of a fall in aggregate market cap from $3 trillion down to a local bottom of $2.44 trillion between March 6 and March 11. As it stands, the consolidation inside this bear flag has the price moving in a rising parallel channel. The bottom line of this flag is set at $2.68 trillion. Technical analysis suggests $2.23 trillion as the downside target for the bear flag. Which means that we can get a much larger reduction of 32% from these current, higher baselines.

That recent market drawdown was enough to liquidate $235 million in leveraged positions in a single day. Of that total, $170 million was from buys — long positions. As of today, the Fear & Greed Index is at 27, indicating that the crypto market is suffering from extreme fear.

the crypto market is currently in a state of fear

  • Crypto Zone

Ether's Performance and Broader Market Sentiment

Ether (ETH) has dropped below $2,000 for the first time since March 20. This drop represents its second day of losses in a row. This drop in the value of Ether only adds to the gloomy mood that has settled over the entire crypto landscape.

This sell-off includes extremely violent “flash crashes” that are occurring across the majority of risk asset classes. This is indicative of a dangerous and growing trend of instability and uncertainty in the financial markets.

Correlation with Traditional Markets

The ongoing correction in the crypto market mirrors a similar weakness observed in U.S. equities, indicating a growing correlation between the two.

Bitcoin has traded almost perfectly in line with the Nasdaq 100 since 2023.

This correlation points to the idea that macroeconomic conditions and investor sentiment in traditional markets are having a greater effect on performance of cryptocurrencies.