The crypto market crash on April 7, 2025, which wiped out 10.92% of value and dropped the global market cap to $2.37 trillion, echoes the panic of Black Monday in 1987. That day, October 19, markets worldwide collapsed unexpectedly, losing an estimated $1.71 trillion.
Like today, the crash sparked fears of deep financial instability. While Black Monday raised alarms about a possible second Great Depression, today’s crash has similarly left investors anxious about the future of digital assets.
Reasons Behind Today’s Crypto Market Crash
Trump Tariff Impact: The recent announcement by former US President Donald Trump introducing a 10% tariff on all imports has sparked fears of a global trade war. China’s immediate response with a 34% levy on US products has intensified these fears, severely impacting industries across Asia. This tension has spilled over into the sector, leading to widespread sell-offs.
Trump Recession Signals: Analysts are now predicting a potential recession this year, with a 67% probability, according to the Kalshi.
Source: Kalshi
This predicted recession, termed the “Trump recession,” arises from shifts in presidency, regulations, and trade policies. Investors are anxious, causing instability and further sell-offs in crypto.
Massive Liquidations: According to Coinglass, in the past 24 hours, over 460,000 traders faced liquidation, totaling around $1.42 billion. The largest single liquidation occurred on OKX’s BTC-USDT-SWAP, valued at $7.08 million, intensifying the downward pressure on coin prices.
Stock Free Fall: As per The Kobeissi Letter, the US stock continues downward, with S&P 500 futures falling 22%, which is an indication of a bear market. About $400 billion per trading day has been wiped out from the sector over the last month, contributing to investor uncertainty and indirectly affecting the sector.
Fear and Greed Index: The Fear and Greed Index, currently 23 (Extreme Fear), shows panic and nervousness among investors. Historically, extreme fear levels have indicated times to buy; however, prevailing volatility renders predictions unreliable.
Market Sees Reverse Altcoin Season
The crypto crash has hit nearly every top coin:
Bitcoin (BTC): BTC fell by 8%, currently trading at $76,361.56 with a market cap of $1.51 trillion.
Ethereum (ETH): ETH declined precipitously by more than 16%, with a price of $1,495.46 and a market cap of $180.96 billion.
XRP: XRP dropped by 15%, to $1.77, with a $103.37 billion market cap.
Solana (SOL): SOL dipped almost 15.5%, now at $101.24 with a market cap of $52.17 billion.
Dogecoin (DOGE): The meme coin favorite fell around 16%, with a price of $0.1389 and a $20.67 billion cap.
Investors Diverting from Crypto to Gold?
Notably, as the industry plummet, gold prices have risen up to 0.7% in a day. Gold is now priced at $3,048.0, perhaps an indication that investors are transferring their money from risky crypto assets to secure investment vehicles such as gold. Such a movement could continue to influence coin prices in the negative direction, as gold appears more desirable in uncertain sector conditions.
Will Crypto Recover or Decline Further?
In spite of the current downturn, there are encouraging signs that the sector will recover:
-
As per Lookonchain data, a “7 Siblings” whale investor recently bought 24,817 ETH at a discounted price of $1,700 for $42.2 million. They now own more than 1.21 million ETH worth $1.93 billion, indicating persistent investor confidence.
Source: X
-
Furthermore, 76 new parties have recently acquired substantial quantities of Bitcoin (BTC), each owning over 1,000 BTC, according to Ali Martinez. This growth reflects increased interest from institutional investors.
Source: X
-
Key upcoming events, like the Ripple-SEC case hearing on April 10, and future CPI and PPI data releases, may strongly affect the sector recovery. Prices may recover rapidly if these events are bullish for the space.
Conclusion: Should You “Buy the Dip”?
The latest crash, which was reminiscent of past shocks such as “Black Monday,” has certainly dented investor confidence. Yet high levels of fear are also a sign for long-term investors to look for buying opportunities. As experts advise, the current moment may be the time to “buy the dip,” considering underlying positive signs in investor behavior.
Investors should cautiously observe these forthcoming trends and events prior to making additional choices. The crypto continues to be very volatile but stable, indicating future potential recovery.
