Bitcoin’s Dramatic Plunge: A Comedy of Errors in Crypto

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What to know:

By James Van Straten (All times ET unless indicated otherwise)

As the clock ticks down to the end of March, the crypto world finds itself in a rather dismal state, akin to a tragicomedy where the punchline is a plummeting price. Bitcoin (BTC), that once-mighty titan, has taken a nosedive of 10%, marking its most woeful first quarter since the fateful year of 2020. Ether (ETH), not to be outdone, has also decided to join the pity party, posting its weakest first quarter since its very inception. Yet, in a twist of fate, Bitcoin has managed to maintain a semblance of stability this March. 🥴

Meanwhile, the markets are caught in the throes of President Donald Trump’s first 100 days, a time historically characterized by uncertainty and volatility—like a soap opera with too many plot twists. This delightful chaos is expected to linger at least until the end of April, so grab your popcorn! 🍿

As we approach the quarter’s end, the London Crypto Club warns of negative liquidity and position management that could lead to a delightful rollercoaster of volatility and whipsaw price action. Hold on tight, folks!

Despite the short-term gloom, our optimistic friends at the London Crypto Club maintain a bullish outlook for the second quarter. A slightly more dovish tone from the Federal Reserve—without actual rate cuts, mind you—combined with a weakening U.S. dollar and increased fiscal spending in the European Union, suggests that the U.S. economy is slowing but not quite ready to collapse into a heap of despair. They believe these factors will support a robust three months ahead. 🌈

Bitcoin’s sell-off began on Thursday, following Trump’s lack of a concrete update on a bitcoin strategic reserve or a tax-free crypto capital gains policy. “Market participants were hoping for a tax-free capital gains framework or a bitcoin national reserve accumulation plan,” noted Blockhead Research Network (BRN). Instead, Trump reiterated his general support for the crypto industry, highlighting the role of stablecoins in maintaining the U.S. dollar’s dominance in global trade. While this is supportive in the long run, the absence of immediate policy commitments is a short-term bearish signal. Talk about a letdown! 😒

BRN sees digital assets struggling to sustain breakouts, with accumulation continuing at lower levels, particularly for altcoins. “Despite near-term weakness, we recommend staying heavily invested, as the market could react swiftly to the next positive development. Support levels are not far from current prices,” BRN advised CoinDesk in an email. Stay alert, dear investors!

Token Talk

By Shaurya Malwa

  • Issuance platform Pump.Fun introduced its Pumpswap service on Thursday, allowing tokens made on the platform to be traded on the new service instead of decentralized exchange (DEX) Raydium, where they were previously listed. Talk about a swap meet! 🛍️
  • Pump introduced a new fee structure, replacing the 6 SOL migration fee with a 0.25% trading fee. A bargain, if you will!
  • Plans for a revenue-sharing model are in the works, incentivizing creators to focus on long-term token growth by earning revenue on every trade, moving away from the previous dump-on-buyers dynamic. A noble endeavor!
  • Pump.fun metrics show a decline in token launches and graduations, with 29,000 coins launched on March 8 but only 264 graduating. Success rates are dipping below 1%. Ouch!

Derivatives Positioning

  • Bitcoin futures open interest has declined to 628,000 BTC from the weekly high of nearly 650,000 BTC, alongside marginally positive perpetual funding rates. This indicates that BTC’s 24-hour price drop is largely characterized by unwinding of longs rather than new shorts. A classic case of ‘what goes up must come down.’
  • Open interest in ETH futures remains elevated at record highs above 10 million ETH, signaling that traders are continuing to short a falling market. A risky game!

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2025-03-21 14:31