Crypto markets sell-off deepens as macro and geopolitical risks mount

Cryptocurrency markets extended their decline as rising geopolitical tensions, bond yield pressures, and renewed US–EU trade frictions triggered a global risk-off mood, dragging Bitcoin, Ethereum, and major altcoins to multi-week lows.

The cryptocurrency market remained under pressure on Wednesday, extending a sell-off that has gathered momentum amid worsening macroeconomic conditions and escalating geopolitical risks. Major digital assets slipped sharply as investors cut exposure to riskier assets, mirroring weakness across global equity markets and a renewed flight to traditional safe havens.

Bitcoin, the world’s largest cryptocurrency by market capitalisation, fell more than 3 per cent to trade near the $89,000 mark, while Ethereum suffered a steeper drop of almost 7 per cent, slipping below the psychologically important $3,000 level. Both assets touched their lowest levels in nearly two weeks, underscoring the depth of the current correction.

Global trade tensions rattle risk appetite

The latest downturn followed a broad sell-off in global equities, triggered by renewed trade tensions between the United States and Europe. Investor sentiment was shaken after US President Donald Trump issued fresh tariff threats, reviving fears of a wider trade conflict between two of the world’s largest economic blocs.

Markets reacted swiftly to the prospect of higher trade barriers, which could dampen global growth, disrupt supply chains, and reignite inflationary pressures. As risk aversion rose, capital flowed out of equities and cryptocurrencies, with investors gravitating toward safer assets such as gold and silver—both of which hit record highs during the session.

The crypto market, often seen as a high-beta asset class, has increasingly mirrored movements in global financial markets. As digital assets become more integrated into mainstream finance, their sensitivity to macroeconomic shocks has grown, making them vulnerable during periods of global uncertainty.

Bond yields and liquidations intensify pressure

Adding to the bearish momentum was a sharp rise in US and Japanese government bond yields, which further dampened appetite for speculative assets. Higher yields increase the opportunity cost of holding non-yielding assets like cryptocurrencies, prompting investors to rebalance portfolios toward fixed-income instruments.

In the past 24 hours alone, more than $1 billion worth of leveraged crypto positions were liquidated, according to market data. Analysts attributed the scale of the sell-off to a combination of leveraged unwinding, exchange-traded fund (ETF) outflows, and a broader shift toward risk-off positioning.

“Over the past 24 hours, global markets have remained cautious amid ongoing geopolitical and trade-related uncertainty, which continues to impact overall risk sentiment,” said Nischal Shetty, founder of WazirX. “This has pressured equities and renewed interest in traditional safe-haven assets like gold. Crypto markets, too, have reflected this caution—not through panic selling, but through consolidation, lower leverage, and reduced risk-taking.”

Long-term crypto outlook remains intact

Despite the sharp correction, industry leaders emphasised that the current phase does not fundamentally alter the long-term outlook for cryptocurrencies. Shetty noted that as digital assets become more embedded in the global financial system, their short-term price movements are increasingly influenced by macroeconomic headlines.

“At the same time, interest in crypto as an alternative financial system remains intact,” he said. “As global clarity improves, market confidence is likely to adjust accordingly.”

This perspective suggests that while near-term volatility may persist, structural drivers such as institutional adoption, blockchain innovation, and tokenisation of assets continue to support the longer-term investment case for cryptocurrencies.

Bitcoin tests key support levels

At the time of writing, Bitcoin was trading around $89,361, down 2.73 per cent over the previous 24 hours, with a trading volume of nearly $57 billion, according to CoinMarketCap data. The flagship cryptocurrency fluctuated between $87,814 and $91,997 during the session, reflecting heightened intraday volatility.

Despite the recent decline, Bitcoin remains roughly 29 per cent below its all-time high of $126,198, which was recorded on October 7, 2025. Analysts say the current correction is testing critical technical levels that could determine near-term price direction.

From a technical standpoint, Bitcoin is trading below its key short-term moving averages. Riya Sehgal, research analyst at Delta Exchange, pointed out that immediate resistance lies near $92,800, while strong support is seen around the $88,000 mark.

“Traders should brace for continued volatility, as macroeconomic uncertainty, bond market stress, and US–EU trade headlines continue to influence sentiment,” Sehgal said. “A breakout above resistance could stabilise momentum, but for now, risk aversion is dominant.”

On-chain data hints at stabilisation

While price action remains weak, some on-chain indicators suggest that selling pressure may be easing. Akshat Siddhant, lead quant analyst at Mudrex, noted a gradual improvement in spot market activity.

“Spot volumes have risen from $8.8 billion to $9.3 billion, and the net buy-sell imbalance has expanded to $81.2 million,” Siddhant said. “These signals suggest an aggressive reduction in sell-side pressure.”

According to Siddhant, $88,000 remains a critical support level for Bitcoin, while $91,800 is the immediate resistance to watch. A sustained move above resistance could signal stabilisation, though broader macro cues are likely to remain the dominant driver.

Ethereum slides below $3,000

Ethereum, the second-largest cryptocurrency, continued to face heavy selling pressure, slipping decisively below the $3,000 mark. As of the latest data, ETH was trading at $2,976, down just over 6 per cent in 24 hours, with a trading volume of $33.75 billion.

The token moved between $2,921 and $3,171 during the session, reflecting sharp swings as traders reacted to both macro developments and broader market weakness.

Sehgal identified resistance for Ethereum in the $3,150–$3,250 range, while support is placed near $2,880. A failure to hold these levels could expose the asset to further downside in the near term, particularly if global risk sentiment deteriorates further.

Altcoins mirror broader market weakness

The sell-off was not limited to Bitcoin and Ethereum. The broader altcoin market mirrored the downturn, with several tokens posting steep losses. Privacy-focused Monero (XMR) led the declines, shedding nearly 19 per cent of its market capitalisation.

Other major altcoins—including Hyperliquid (HYPE), Immutable (IMX), Morpho (MORPHO), Cosmos (ATOM), Quant (QNT), Chiliz (CHZ), Dash (DASH), Render (RENDER), Polkadot (DOT), TRON (TRX), Solana (SOL), and Aave (AAVE)—recorded losses ranging between 4 per cent and 9 per cent.

The widespread nature of the declines highlights the extent to which macroeconomic stress is weighing on the entire digital asset ecosystem, rather than isolated projects or sectors.

Gold-backed tokens and select assets gain

Despite the broad sell-off, a handful of tokens managed to post gains amid the turmoil. Assets linked to gold and alternative hedges outperformed, reflecting the broader shift toward safety.

LayerZero (ZRO), Canton (CC), Story (IP), PAX Gold (PAXG), Tether Gold (XAUt), Tezos (XTZ), and Bitcoin Cash (BCH) were among the tokens that registered gains of up to 12 per cent, according to CoinMarketCap.

The performance of gold-backed tokens such as PAXG and XAUt underscored investors’ preference for assets tied to traditional safe havens during periods of heightened uncertainty.

Outlook: volatility likely to persist

Looking ahead, analysts expect volatility to remain elevated as markets continue to digest macroeconomic data, bond market movements, and geopolitical developments. Upcoming signals from central banks, particularly around interest rates and liquidity conditions, could play a crucial role in shaping investor sentiment.

For now, cryptocurrencies appear firmly tethered to global risk trends. While on-chain data offers some hope of stabilisation, sustained recovery may depend on easing trade tensions, calmer bond markets, and clearer macroeconomic signals.