Market News
Panic Or Opportunity? Bitcoin Drops To $78K As Fear Takes Over - BENZINGA
Bitcoin is back below $80,000, currently trading near $78,000 as of Monday. The move follows a steady decline that began Sunday afternoon just ahead of the U.S. futures market open. The Sunday candle topped out at $83,800 before sellers stepped in, continuing the broader trend of weakness that has been developing since late January.
Bitcoin closed the Sunday bar day down 6%, marking a significant daily loss and highlighting the growing pressure across risk assets. While the selloff has gained momentum, Bitcoin is still trading above a key higher time frame level — the swing low formed on March 11, which bottomed out at $76,560. That level remains a major area of interest for buyers in the short term.
After forming a macro high in late January, the market has struggled to regain bullish momentum. Price action has consistently printed lower highs and lost major levels, including the $94,000 to $91,000 support zone. Although that area was retested, Bitcoin failed to reclaim it and continued trending lower.
One of the primary catalysts for this latest leg down appears to be the escalating tariff war between the U.S. and China. Now, with talk of tariffs expanding to other countries, market participants are growing increasingly concerned. Taiwan's announcement of zero tariffs has only added to the uncertainty, raising questions about whether this will pressure other nations to follow suit and what that could mean for global trade.
At the same time, there are growing fears that the U.S. economy is slowing down faster than expected. JPMorgan Chase recently revised its U.S. real GDP outlook, now projecting a -0.3% contraction for the year, a steep drop from the earlier +1.3% growth estimate. Alongside that, unemployment is expected to rise to 5.3% as economic activity weakens, while core PCE inflation has been revised up to 4.4%, a jump of 1.4 percentage points, largely attributed to the effects of new tariffs.
Source: Michael Feroli JP Morgan Newsletter – Screenshot by @DeItaone on X
With no clear policy roadmap and continued mixed messaging from officials, investor sentiment has taken a serious hit. Some fear gauges are now indicating levels of anxiety even higher than during the 2020 COVID crash, underscoring just how on edge the market has become.
Source: Baker, Bloom, and Davis – Screenshot by kylascan on X
Ending Thoughts
Whether $78,000 becomes a short-term bottom or gives way to a deeper pullback will largely depend on how the macro narrative evolves and whether buyers are willing to defend critical support zones.
The important aspect to understand is that this recent downfall isn't just a Bitcoin problem — it's a global economic issue. Risk assets across the board are under pressure, from equities to commodities. Even traditionally "safe" assets like gold have seen a pullback during futures open.
Despite the selloff, Bitcoin is actually holding up relatively well compared to other markets. It's still trading above the election low that I mentioned in a previous article. I expect this relative strength to continue, even if we see further downside across broader markets. I wouldn't be surprised to see Bitcoin rally in the near future if it can maintain its bullish divergence with the stock market.
