Cryptocurrency prices have seen a significant downturn in the past few hours, with Bitcoin (BTC) experiencing a drop of approximately 3% within the last 24 hours. Meanwhile, key altcoins such as XRP, BNB, and SOL have fallen between 4% and 5% during the same timeframe.
The overall cryptocurrency market, as indicated by the CoinDesk 20 Index (CD20), has lost about 3.3% of its value within this period. This steep decline brings BTC’s weekly performance down by 1.7%, while the CD20 has decreased nearly 5%.
In the last day, more than $300 million in long positions were liquidated on centralized exchanges, alongside $38.8 million in short positions, according to data from CoinGlass.
This downturn seems to be part of a broader derisking strategy among traders as they brace for the effects of reciprocal tariffs proposed by President Donald Trump, set to take effect on April 2. This situation escalated following core Personal Consumption Expenditures (PCE) data that was hotter than anticipated on Friday.
This week has also shown a decline in consumer confidence data, which fell more than expected, while the index for future expectations reached a 12-year low, significantly below levels typically associated with an impending recession.
These combined factors have prompted investors to reduce their exposure to riskier assets, resulting in a shift towards safer options. According to CoinDesk Data’s latest report on stablecoins, gold-backed cryptocurrencies have gained from this risk-averse move, as their market capitalization rose above $1.4 billion in March.
Interestingly, gold-backed cryptocurrencies are counteracting the bearish sentiment in the market. While the CD20 index has decreased over 3% in the past 24 hours, assets like PAXG and XAUT have appreciated by 0.7%, exceeding $3,100. These tokens have seen increases of over 18% year-to-date, contrasting with BTC’s decline of 12.5% and the CD20 index’s drop of 28% this year.
