Bitcoin Drops 2% as Major Crypto Tokens Fall Up to 5% in Broad Market Decline

Bitcoin (BTC) declined 2% on Monday, trading at approximately $83,300 during Asian trading hours after briefly testing resistance at $84,000 the previous day. The leading cryptocurrency’s pullback triggered broader market weakness, with major alternative tokens experiencing losses of up to 5%, according to data from CoinDesk Indices.

The $84,000 level now represents a critical threshold for Bitcoin to overcome for potential upward momentum. While most major cryptocurrencies experienced losses, BNB Chain’s token (BNB) bucked the trend with a 3% gain, standing as the only major cryptocurrency in positive territory.

XRP, Solana’s SOL, Cardano‘s ADA, and Dogecoin (DOGE) were among the hardest hit, with each declining as much as 5% over the 24-hour period. This downward pressure comes amid market stagnation following last week’s sell-off, which was primarily triggered by concerns over U.S. tariffs and deteriorating macroeconomic conditions.

Market analysts point to specific trading dynamics as potential catalysts for the current market behavior. “Trading volume has increased for altcoins after Trump’s World Liberty Financial bought MNT and AVAX, the latter of which was also part of an ETF application by VanEck,” noted Nick Ruck, director at LVRG Research. “This may be a sign that traders and investors will focus on altcoins in the short term for better gains compared to large-cap coins like Bitcoin or Ethereum.”

The current market environment appears heavily influenced by institutional trading strategies. Augustine Fan, Head of Insights at SignalPlus, told CoinDesk: “The current belief is that the current sell-off is entirely driven by the massive ‘multi-strat’ hedge fund strategies that have dominated the macro space.”

Multi-strategy trading approaches involve hedge funds deploying diverse tactics across multiple asset classes to maximize returns. In Bitcoin’s case, a common multi-strat approach is the basis trade, where funds purchase spot BTC (often through ETFs) while simultaneously shorting BTC futures to profit from price differentials. This strategy enables traders to secure low-risk gains when spreads are advantageous.

However, when basis trade profits diminish due to tightening spreads or market shifts, funds typically exit positions by selling Bitcoin and ETF shares simultaneously. This liquidation activity likely amplified recent selling pressure, particularly amid heightened volatility related to tariff concerns.

Despite current market turbulence, bullish sentiment persists among many traders. Fan added: “Equity valuations outside of the major large caps are relatively contained vs historical averages, and economic hard data is likely to outperform the rapid deterioration in soft data, so market consensus is that this remains a ‘buy the dip’ market while we work through the tariff volatility.”

The cryptocurrency market continues to show correlation with U.S. equities, suggesting potential choppiness ahead as investors navigate economic uncertainties. Market participants are increasingly concerned about the possibility of a U.S. recession triggered by Trump’s tariff policies, though many remain optimistic about cryptocurrency’s medium-term prospects.

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